The number of federal student loan borrowers in default continued to climb during the second quarter of 2026, with new government data showing an additional 400,000 borrowers fell into default status over a three-month period. According to updated Federal Student Aid (FSA) data through June 30, 9.3 million borrowers were in default on their federal student loans, up from the prior quarter. The defaulted loans now total approximately $234 billion, representing about 14 percent of the federal student loan portfolio.
The increase comes as the Trump administration continues to overhaul the federal student loan repayment system following the end of the Biden-era SAVE repayment plan. Newsweek reached out to the Department of Education for comment via email. Borrowers who enter default face some of the harshest consequences in the federal student loan system.
Federal student loans generally enter default after 270 days of missed payments. Once in default, borrowers can see significant damage to their credit scores and may become subject to wage garnishment, tax refund offsets and even reductions to their Social Security benefits. While the Department of Education has temporarily paused wage garnishment and the seizure of certain federal benefits, officials have indicated that the pause is not permanent and that they will begin resuming collections activities in the near future.
The latest FSA figures showed that 9.3 million borrowers were in default as of June 30. That marks an increase of roughly 400,000 borrowers from the previous quarter. Borrowers in default now owe approximately $234 billion with defaulted debt accounts for about 14 percent of the federal student loan portfolio.
Meanwhile, an additional 1.5 million borrowers are in late-stage delinquency and could enter default within six months if they remain behind on payments. Experts say the new data reflects the larger student loan repayment challenges that emerged after pandemic-era relief measures ended. The surge in defaults has followed the expiration of protections that were initially put in place during and after the COVID-19 pandemic.
Federal student loan payments were paused for several years during the pandemic, and the Biden administration later provided a one-year "on-ramp" period that prevented the most severe consequences for borrowers who missed payments after repayment resumed. However, now that those protections expired, delinquent loans have begun moving back into default status. Also, borrowers who were already struggling eventually moving from delinquency into default.” At the same time, the Trump administration has implemented major changes to the repayment system, including eliminating the Biden administration's SAVE plan and replacing it with a new repayment structure that took effect July 1.
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