In late July, the U.S. Department of Education issued a report listing the rate of federal student-loan borrowers who had entered repayment for the first time on or after January 2020 and who were 90 or more days past due. For over 5,700 colleges in this report, at least one in four of their recent students are at significant risk of defaulting on their student loans in the coming months. That’s in addition to the over 5 million borrowers who were already in default at the end of June. As of the end of March 2025, only 35% of borrowers were making payments on time.

This spike was inevitable. Federal student-loan borrowers had their payments (and interest) paused for almost four years, meaning millions were out of the habit of making payments. They then resumed repayment during a very different economy than what existed prior to the pause. These borrowers were also contending with new repayment rules.