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Student loan defaults are up to a record high, with 9.5 million borrowers in default, meaning they are more than 270 days behind on loan payments, according to data from the Office of Federal Student Aid.
The near-10 million borrowers in default represent a record-high and nearly double the number in default at the nadir of a pandemic-prompted moratorium on student loan payments enacted by former President Joe Biden.
In March 2025, months after a default-halting payment pause that Biden signed at the onset of the COVID-19 pandemic ended, the U.S. had 5.3 million borrowers in default.
The Biden-era moratorium technically ended in January 2024, but the former president tacked on a 9-month extension that lasted until September 2024. With borrowers having 270 days to pay before entering default, June 2025 started a skyrocketing of defaults that saw the U.S. add over 4 million defaulted borrowers.
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The 9.5 million defaulted borrowers represent more than 20% of all federal student loan borrowers.
Of the $1.7 trillion of federally-backed student loans in the U.S., $233.3 billion is in default, according to the Office of Federal Student Aid data.
Borrowers in default are vulnerable to a number of collection methods that include loans being sent to collections agencies or having their wages garnished directly from their paychecks.
The Trump administration has thus far been unwilling to take such strong measures, with the Department of Education choosing to delay a plan to resume garnishment in January.
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But following a Republican Attorneys General-led effort, a federal appeals court terminated the SAVE Plan, a Biden-built program that lowered repayment rates for student loan borrowers and which 7.5 million Americans had signed up for.
Though the challenge was led by red state Attorneys General, the Trump Department of Justice (DOJ) backed the efforts by encouraging federal courts to vacate the plan and reaching settlements with states that were suing, such as Missouri.
The U.S.’s southern states have the highest concentrations of borrowers in default, with Mississippi leading the way at over 28% of its borrowers in default, according to an analysis from the Associated Press (AP).
While Mississippi leads all U.S. states, the territory of Puerto Rico has an even higher concentration of borrowers in default at over 30%.
Fox Business contacted the White House and the Department of Education for additional comment.
The Associated Press contributed to this report.
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