Student loan defaults jump by 4.2 million after pandemic pause

1 in 5 federal borrowers now behind on payments

A surge in defaults on federal student loans has left millions of borrowers struggling to regain financial stability, federal data and advocates show.

The number of borrowers with defaulted loans rose by more than 4.2 million between April 2025 and March 2026, according to an Associated Press analysis of Education Department data. That brings the total in default to approximately 9.5 million — more than one in five of all federal student loan borrowers.

Default occurs when a borrower is more than nine months behind on payments. The consequences can be severe: credit scores are damaged, and the government can garnish wages or Social Security payments. The Trump administration has held off on such involuntary collections, the AP reported.

The surge includes many borrowers who fell behind in 2024, when loan payments resumed after a four-year pandemic-era freeze. The AP analysis found that hundreds of thousands more are now several months behind, raising the risk of another wave of defaults.

For borrowers like Ashley Dreahn, 40, of Texas, the return to payment has been devastating. After filing for bankruptcy in 2022, Dreahn thought her student loans had been discharged. This spring she learned from a credit-monitoring service that her loans had grown to $94,298 with interest and she was in default.

“I absolutely broke down,” Dreahn told the AP. She had been working at a Texas prison and saving for weight-loss surgery when the notice arrived.

Advocacy groups say the situation is worsening. “Folks are struggling to make ends meet and cover all the rising costs of everything else. The growing student loan bills are making things worse and folks are falling behind,” said Aissa Canchola Bañez, policy director for Protect Borrowers.

The Education Department is dismantling the SAVE plan, a low-income repayment option that had been one of the most affordable paths for borrowers. The department says the changes are intended to simplify a fragmented system. But advocates argue that eliminating SAVE will push millions more into default.

The Biden administration enacted the payment freeze and later launched the SAVE plan as a means of relief. The Trump administration has taken a different approach, including handing defaulted loan management to the Treasury Department.