U.S. student loan defaults surge after pandemic‑era payment pause ends

Federal student loan defaults in the United States have risen sharply since the pandemic‑era payment moratorium and the subsequent one‑year “on‑ramp” protection ended in September 2024. Data from the Department of Federal Student Aid show that roughly 9.5 million borrowers – about one in five of the federal loan portfolio – are now in default, up from 5.3 million a year earlier, representing more than 13 % of the $1.64 trillion loan balance.

The wave has hit older borrowers most hard; the average age of new defaulters is near 40, and many had been current before the pause. Policy changes compound the problem: the Trump administration has eliminated the generous SAVE income‑driven repayment plan and has delayed implementation of wage and Social Security garnishments, though analysts warn collections could begin within a year. Advocates warn the growing defaults could further strain an already fragile economy.