Student loan borrowere are in trouble, data show.
A record number of loans are in default, according to an Associated Press analysis this week
Defaults have grown by about 4.2 million to an all-time high of 9.52 million since June 2025, when borrowers were allowed again to default on loans, according to data from the Office of Federal Student Aid. During the pandemic, the government paused student loan payments and prevented loans from entering default. If borrowers don’t act quickly, the defaults could haunt them for years, experts said. “A federal student loan default can result in wage garnishment, tax refund garnishment, and have negative impact on credit for years to come,” said Stacey MacPhetres, senior director of education finance at Bright Horizons, provider of educational advisory services to organizations and families.
The Trump administration has delayed refund and wage garnishment, but they’re expected to return. What should student loan borrowers do? Borrowers in default need to either make repayments or enter rehabilitation, MacPhetres said.