- Federal student loan defaults climbed to $234 billion by June 2026 as more than 9.3 million borrowers entered default, while another 1.5 million remained at risk of joining the defaulted portfolio.
The US student loan system is facing another major pressure point as borrowers move further into repayment following years of pandemic-era disruptions.
New data from Federal Student Aid shows that the number of borrowers with defaulted federal student loans increased by roughly 400,000 during the quarter ended June 30, bringing the total above 9.3 million. Their outstanding defaulted loans totaled $234 billion, equal to about 14% of the $1.64 trillion federally managed portfolio.
The figures were highlighted in a Forbes report on the rising student loan default burden, which also noted that the federal government is preparing to intensify collection activity after years of pandemic-related pauses and delays.
The situation is not limited to borrowers already in default. Federal Student Aid said roughly 3.5 million recipients were more than 30 days delinquent in June, including about 1.5 million in late-stage delinquency who were at risk of entering the defaulted portfolio within six months.
Student Loan Defaults Rise as Borrowers Leave SAVE
The increase in defaults comes as millions of borrowers transition out of the Saving on a Valuable Education, or SAVE, plan and related forbearance. Federal Student Aid reported that about eight million recipients remained in forbearance as of June, with roughly $459 billion in loans associated with borrowers in that status. The number had fallen by about 400,000 from March as more SAVE borrowers moved toward repayment.
More than 17.4 million recipients, representing about 43% of the 40.5 million recipients in the federally managed portfolio, had at least one loan in repayment or delinquency. Those loans totaled approximately $658 billion.
The end of SAVE is particularly important because borrowers must transition to other repayment arrangements. Federal Student Aid says the SAVE plan is no longer available following a federal court order, while borrowers with defaulted loans generally cannot enroll directly in an income-driven repayment plan until they resolve the default.
The changing repayment environment comes alongside broader household debt pressures. Recent Wealthier Today coverage of debt among younger Americans showed that student debt remains part of a wider borrowing burden, with the Federal Reserve Bank of New York reporting total US household debt of $18.77 trillion at the end of the second quarter.
For borrowers already struggling with monthly expenses, a transition to a different repayment plan can create another financial strain.
Forbes also reported that servicing errors and system problems have complicated some borrowers' efforts to access repayment assistance, although those claims come from the publication's reporting and borrower advocacy groups rather than the government's portfolio statistics.
Collections Could Add Pressure on Borrowers
Default carries consequences beyond the balance shown on a borrower's account. Federal Student Aid says borrowers who remain in default can face involuntary collection measures, including wage garnishment and Treasury offsets. Under current federal rules, wage garnishment can take up to 15% of disposable pay, while Treasury offsets can withhold certain federal payments, including tax refunds.
The federal government has not announced a specific date for a broad restart of these collection measures. Forbes reported that the Education Department and Treasury are preparing to resume more aggressive collection activity, while noting that the agencies had not publicly provided a restart date.
At the same time, the government has created a new mechanism for borrowers trying to resolve their defaults. The Education Department and Treasury launched the Defaulted Loans Support Center on Sept. 30. The online system allows eligible borrowers to compare options, apply for rehabilitation or consolidation, make payments, and review repayment and discharge information.
Loan rehabilitation and consolidation can have different consequences. Federal Student Aid says rehabilitation can remove the default record from a borrower's credit history after the required payments are completed, while consolidation can provide a faster route out of default but may leave the default record on the credit history and can involve additional costs.
The scale of the problem remains significant. Federal Student Aid said the broader federally managed portfolio stood above $1.64 trillion as of June, while the total federal student loan portfolio exceeded $1.7 trillion across 42.3 million recipients.
The latest numbers therefore point to two separate pressures: millions of borrowers are already in default, while millions more are delinquent or transitioning between repayment arrangements.
That makes the next phase of the student loan repayment system important not only for borrowers facing higher payments or collection risks, but also for the federal government as it manages a portfolio exceeding $1.7 trillion.