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With how the economy is, I can barely afford to live. I have to choose between rent, loans, or putting food on the table. There’s no help and it feels like [the] government doesn’t care. – Survey Respondent
As families across the nation face ever-rising living costs, student loan burdens continue to exacerbate financial struggles for millions of borrowers. In the absence of reliably updated data on the state of the federal student loan portfolio from the U.S. Department of Education (ED), TICAS commissioned Data for Progress to complete a representative survey of federal student loan borrowers currently in repayment. You can see an overview of the survey findings here.
The survey findings show that managing student loan debt is making it more difficult for borrowers to keep up with their other bills, to find secure housing, or to save for retirement. More than four in ten borrowers (45%) report making tradeoffs between loan payments and covering their basic needs, and one fifth (20%) of those surveyed said they are currently in either delinquency or default.
In addition, too few borrowers know about ways to lower their monthly payments or access debt relief: 15 percent of borrowers report having heard “nothing at all” about income-based repayment plans, while half (51%) report having heard only “a little.” Nearly one-quarter of borrowers (23%) haven’t heard anything about the Public Service Loan Forgiveness program, and fewer than half (47%) of borrowers are aware of a program that discharges loans for borrowers with severe disabilities.
These findings bring even greater urgency to ongoing concerns about a looming “default cliff,” where an unprecedented number of borrowers struggle so much to repay their loans that they default on their payments in droves.
The problems go beyond a borrower’s debt balance itself. Dysfunction in the federal government continues to keep federal student loan borrowers in a state of perpetual chaos. While the pandemic payment pause provided critical relief for many borrowers, the transition back into repayment had been a bumpy, confusing one, even before the added tumult of the current administration.
Unsurprisingly, nearly two thirds of borrowers (58%) report having little trust that the federal government will help keep their loans affordable. Borrowers expressed unhappiness with the current administration’s dismantling of the Education Department, anger that affordable repayment plans were offered and then taken away, and frustration that the previous administration promised debt forgiveness that never came.
Beyond affordability, borrowers report mixed experience with servicers: more than half (61%) of borrowers report having communicated with their servicer to resolve an issue with their account; of those borrowers, three-quarters (75%) said they were able to work with their servicer to resolve the issue. However, nearly half of those borrowers (48%) reported facing long wait times to access help, one quarter (24%) said their servicer provided them with inaccurate information, and one in ten borrowers (11%) believe the balance shown on their account is incorrect.
These findings align with the limited data that ED has released so far this year. At the start of the pandemic pause in March 2020, 8.6 million borrowers were in default. While a portion of those borrowers resolved their default during the pause—either through the “Fresh Start” program or via having their debt discharged—new ED data released in November show that as of October 2025, more than 5.5 million borrowers with over $140 billion in outstanding federal student loans were in default. In addition, 1.17 million borrowers were 30-89 days delinquent, 1.56 million were 90-269 days delinquent, and 3.68 million were 270+ days delinquent.
In an August 2025 data release—the most recent update to the Federal Student Aid Data Center—ED itself warned of a default cliff: “While no new borrowers have defaulted since March 2020 due to the payment pause [as of the end of June 2025], many delinquent borrowers are in danger of defaulting in the coming months.”
ED has yet to release updated data showing the current state of the portfolio, but a recent report from FICO analyzing consumer credit behaviors shows that the average FICO score fell two points from 2024, driven by rising credit card utilization and a spike in missed payments, in part due to resumed student loan delinquency reporting.
Student loan default comes with severe and punitive consequences. In addition to ongoing credit score damage and hefty collection fees, the federal government also wields vast extra-judicial powers to collect student debt, including garnishing wages and seizing Social Security payments and tax refunds that are targeted to households with very low incomes, including the Child Tax Credit and the Earned Income Tax Credit. These seizures compound financial hardship for those who can least afford it.
Notably, more than half (51%) of those surveyed report receiving a Pell Grant at some point, meaning they likely entered college with a household income of less than $40,000. Prior to the pandemic payment pause, during which no new borrowers could enter default, nearly 90% of those who defaulted on their student loans had once been Pell recipients.
The survey responses also show significant stratification by educational attainment, which aligns with who we already know is most at risk of default: borrowers who didn’t complete a degree or credential. Our survey found that advanced degree holders show better outcomes across nearly all measures, while those with some college but no degree face greater challenges in affording payments and navigating the repayment system. For instance, 20 percent of respondents with some college, no degree report having heard “nothing at all” about income-based repayment plans, while only five percent of advanced degree holders report the same.
Borrowers with associate degrees also report more difficulty than those with bachelor’s or advanced degrees. According to the Community College Research Center, “Though community college students borrow less often and generally have smaller balances than students in other sectors, those who do borrow default at somewhat higher rates than four-year students, although this difference can be fully accounted for by differences in student background characteristics.”
Ultimately, borrowers today have fewer resources than ever to navigate their repayment options, and those options are ever shifting. The Education Department has been gutted, with hundreds of experts now gone from the Office of Federal Student Aid, which administers the federal student loan program and oversees the federal government’s contracted loan servicers. These cuts have eroded the Department’s ability to identify and correct servicing issues and to properly communicate with borrowers. Meanwhile, servicers are scrambling to comply with a stream of changes to the repayment system driven by the recently enacted reconciliation law and ongoing legal challenges to the SAVE repayment plan.
For many borrowers, this is likely to mean default. For those already in default, getting back on track is likely to be even more difficult than ever.
How Policymakers Can Help Borrowers
Given the harm that default brings to individuals, families, and communities, helping borrowers stay out of default has long been a bipartisan priority. Once a borrower enters default, it’s difficult for them to get out, and many of those who do end up defaulting again. The best path forward is to keep borrowers out of default through well-designed safety nets in a well-functioning repayment system.
Via the One Big Beautiful Bill Act, passed into law in July 2025, Republicans in Congress overhauled the federal student loan repayment system. For new borrowers, the law eliminates access to all existing income-based plans and replaces them with a new “Repayment Assistance Plan” (RAP). RAP raises payments for most borrowers—with disproportionate impacts on the lowest-income borrowers—and extends the maximum repayment term from the current 10-25 years to 30 years, which will likely trap the lowest-income borrowers in debt for decades. The law also eliminates deferment and forbearance options for borrowers facing unemployment and economic hardship.
In addition, under RAP’s monthly payment formula, borrowers will see unpredictable payment spikes whenever their income crosses certain arbitrary thresholds. These spikes, which could penalize borrowers for even small cost-of-living raises, will likely further erode borrower trust.
Taken together, these changes will likely make it harder for low- and middle-income borrowers to keep up with their monthly payments, which could lead to increased delinquency and default rates once they go into effect.
Ideally, lawmakers would reverse the changes made via the reconciliation law and enact a more affordable and accessible repayment system to protect borrowers from default. However, as long as the new repayment system stands, ED must provide timely, clear, and actionable resources to borrowers to help them manage these changes. Servicers must also be held accountable for properly managing borrower accounts and providing expedient customer support. At minimum, this means properly calculating borrowers’ monthly payment amounts, ensuring correct reporting to credit agencies, and correctly tracking borrowers’ progress toward loan discharge.
Of course, the Department and its contracted loan servicers need sufficient resources to do all this. We urge Congress to recognize its role in ensuring the Department can and will carry out its statutory responsibilities—or there is sure to be a default disaster affecting the immediate financial well-being of millions of their constituents.
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