Defaults On Student Loans Surge

Defaults on student loans have surged across the United States, reaching record levels as borrowers struggle to keep up with payments. The numbers have spiked since payments started coming due again following a lengthy pause intended to provide relief during the COVID-19 pandemic. Today, around 9.5 million people — 1 in 5 federal student loan borrowers — are in default, meaning they are more than nine months behind on their payments. While credit scores can suffer when borrowers are just a few months behind, entering default brings the possibility of more serious consequences, including garnished wages or Social Security payments. For now, the Trump administration has held off on such involuntary collections.