Federal Student-Loan Defaults Rise to 9.5 Million After Payment Pause Ends

The number of federal student-loan borrowers in default rose by more than 4.2 million between April 2025 and March 2026, bringing the total to approximately 9.5 million, or more than one in five borrowers, according to an Associated Press analysis of federal data.

Ashley Dreahn, 40, of Texas, received notice this spring that loans she believed had been discharged in her 2022 bankruptcy had grown to $94,298 with interest and entered default. She had enrolled at Texas Woman’s University in 2004, earned a history degree, later obtained two associate degrees while teaching, and began work last year as a prison supervisor in Huntsville, about 70 miles north of Houston.

“I absolutely broke down,” Dreahn said after learning of the default. She had checked her credit report after filing for bankruptcy and saw messages indicating the loans were paid off, a notice sometimes issued during consolidation or transfer even when balances remain. An additional 870,000 borrowers hold loans between 181 and 270 days past due, placing them on the edge of default.

Thirty-three percent of borrowers who attended for-profit schools nationally are at least 90 days late on payments, more than twice the rate at public schools. The surge follows the end of a pandemic relief measure that suspended payments until 2023 and a subsequent one-year grace period that concluded in fall 2024. Loans enter default after nine consecutive months of missed payments.

Barbara Howaniec, 63, of Auburn, Maine, defaulted after a repayment schedule change required 355 additional payments that would extend until she reached age 91. She had borrowed about $62,000 for a master’s degree from New York University in 2001 and still owes roughly $67,000.

Shannon Khan, 46, of Webster, Texas, saw her required monthly payment rise from zero under the SAVE plan to $847 last fall, with a further increase scheduled to $1,683.

She has stopped payments for two months while seeking alternatives. The Education Department is dismantling the SAVE income-driven repayment plan and implementing other changes intended to simplify the system. The Trump administration in January 2026 walked back earlier plans to begin collections on defaulted loans, though a Moody’s Analytics report released this spring stated garnishments are likely to resume within the next year.