U.S. colleges face high federal student loan nonpayment rates

Data from the U.S. Education Department reveals that 500 colleges and universities in the United States have a federal loan nonpayment rate of at least 40%. The findings focus on approximately 17 million borrowers who entered repayment between January 2020 and May 2025.

At many of these institutions, more than half of recent borrowers are at least three months late on payments or have entered default after nine months. Experts suggest several causes for these high rates, including confusion stemming from pandemic-driven disruptions to the student loan system and concerns regarding the value of education provided by certain schools.

Critics and advocates note that many of these institutions, particularly for-profit schools, may charge high tuition for programs that do not adequately prepare students for careers. This trend poses a risk not only to borrowers but also to taxpayers, as many of these schools rely heavily on federal student aid.