Student Loan Update: 400,000 More Borrowers in Default Under Trump Admin
The defaulted loans now total approximately $234 billion, representing about 14 percent of the federal student loan portfolio.
By the second quarter of 2026, the number of federal student loan borrowers in default rose by 400,000, according to updated Federal Student Aid (FSA) data. As of June 30, 9.3 million borrowers were now in default, totaling $234 billion, or approximately 14 percent of the federal student loan portfolio. The increase follows the Trump administration's efforts to return to normal repayment and collections, which has resulted in borrowers facing the consequences of default.
Ellen Keast, a spokesperson for the Education Department, stated that the previous administration's policies created confusion and contributed to the high default rates. Defaulted loans typically enter status after 270 days of missed payments, leading to consequences such as damage to credit scores, wage garnishment, tax refund offsets, and reductions in Social Security benefits.
Borrowers in default may face wage garnishment and tax refund offsets, and the Education Department has temporarily paused wage garnishment, with officials indicating that the pause is not permanent. Experts note that the surge in defaults is a result of the expiration of pandemic-era protections, as borrowers who remained delinquent under the Biden administration's SAVE repayment plan are now facing the consequences of default.
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