Key Points
- Federal student loan defaults rose by about 400,000 last quarter to 9.3 million borrowers and another 1.5 million are in late-stage delinquency.
- Defaulted loans make up about 14% of federal student loan debt, up from 12.5% before the pandemic.
- Balances in income-driven repayment plans grew from $740 billion to $792 billion, as borrowers leaving the SAVE plan moved into IBR and PAYE.
Federal Student Aid posted its quarterly portfolio update on September 22, 2026, and the data through June 30 shows student loan defaults still rising. The number of borrowers with defaulted loans in the federally managed portfolio grew by about 400,000 during the quarter to more than 9.3 million. Those borrowers owe $234 billion, roughly 14% of the $1.64 trillion portfolio the Department of Education manages directly.
That total now sits above the 9 million figure cited just last week when senators pressed the Education Department over its $1 billion servicing fund.
The six-month trend is ugly. When FSA released its December 2025 numbers in March, 7.7 million borrowers held $180 billion in defaulted federal student loans. Compared with that report, the defaulted portfolio has added roughly 1.6 million borrowers and $54 billion in the first half of 2026.
The overall portfolio tracked on the FSA Data Center now covers 42.3 million recipients and more than $1.7 trillion, up nearly 4% in dollars from June 2025, and student loan default accounts for a growing slice of it.
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Why It Matters
Student loan default carries massive consequences, and it’s one of the worst financial things that can happen to an individual. The impact goes far beyond the collection activity on the student loans.
A New York Fed analysis found credit scores for defaulted borrowers fell 91 points on average, from 567 to 476. Defaulted loans are also subject to the Treasury Offset Program, which can seize tax refunds and part of Social Security benefits, plus administrative wage garnishment of up to 15% of disposable pay.
The 9.3 million figure is large. FSA reports that more than 80% of ED-serviced recipients in active repayment are current, which leaves nearly 20%, or about 3.5 million recipients, more than 30 days past due.
Around 1.5 million of them are in late-stage delinquency that FSA says puts them at risk of default within the next six months. If none of those borrowers catch up, the defaulted population would approach 10.8 million by the end of 2026, a number that would push the 12 million at-risk borrowers we flagged earlier closer to reality.
It’s important to note, though, that some of these borrowers will catch up. It’s one of the reasons why AP reporting earlier this year got this number wrong. They assumed that everybody in late-stage delinquency would not repay.
| Metric | Dec. 2019 | June 2026 | Change |
|---|---|---|---|
| Recipients in default | 7.7M | 9.3M | +21% |
| Dollars in default | $168B | $234B | +39% |
| Federally managed portfolio | $1.34T | $1.64T | +22% |
| Default share of portfolio | 12.5% | 14.3% | +1.8 pts |
| 31+ days delinquent (by dollars) | 12.7% | 15.7% | +3.0 pts |
| Borrowers in IDR plans | 8.2M | 13M | +59% |
How Today Compares To 2019 Immediately Before The Payment Pause
It’s important to compare these numbers to before the pandemic, and when you do so, you’ll notice they’re closer to the baseline than the headline number suggests.
In December 2019, the last quarter before the payment pause, FSA reported 7.7 million recipients holding about $168 billion in defaulted loans. Today’s 9.3 million recipients and $234 billion represent increases of about 21% in borrowers and 39% in dollars since then.
In December 2025, the default rate matched 2019 exactly, so all of the increase in borrowers came in the first half of 2026, more than two years after the restart of student loan payments.
The student loan portfolio grew significantly over the same stretch. The federally managed portfolio stood at $1.34 trillion in December 2019, compared with $1.64 trillion now, a 22% increase. Defaulted loans made up about 12.5% of that portfolio in 2019 and about 14.3% today, an increase of less than two percentage points.
The bigger shift is balance size: the average defaulted recipient owed roughly $21,800 in 2019 and about $25,200 now, which means borrowers who move from delinquency into default now carry larger balances than before the pause. This makes sense because the average borrower in the SAVE forbearance saw their loan balance grow by $3,500, according to The College Investor’s estimates.
Delinquency is also worsening. FSA puts the 31-plus-day delinquency rate at 15.7% of dollars in active repayment, compared with 12.7% in December 2019, though that rate has come down from 18.6% in December 2025. FSA also notes 2019 marked the tail end of a multi-year decline in delinquency, so the pre-pause benchmark was a historically low point, while the Fresh Start program moved defaulted loans back into good standing during the pause and lowered the starting count.
Where Borrowers Stand Now
The rest of FSA’s latest data shows how many borrowers are still working through the major student loan transition:
- Borrowers in repayment: 17.4 million recipients, about 43% of the federally managed total, have at least one loan in repayment or delinquency, holding roughly $658 billion.
- Forbearance shrinking: 8 million recipients still have a loan in forbearance, down about 400,000 since March, with $459 billion in balances. FSA expects that count to keep falling as SAVE plan forbearance winds down.
- Deferment and school statuses: 3.3 million recipients have a loan in deferment totaling $150 billion, while in-school and grace balances make up 8% of outstanding dollars.
- Schools with high nonpayment: About 2,100 institutions now have nonpayment rates at or above 25%, roughly 100 more than in the May 2026 update.
FSA cautions that recipients are counted at the loan level, so one borrower can appear in more than one status. Its report also notes that current figures aren’t directly comparable to prior periods because of the three-and-a-half-year payment pause, the on-ramp period, and Fresh Start.
IDR Balances Climb To $792 Billion
Balances in income-driven repayment keep rising. ED-serviced Direct Loan and FFEL balances enrolled in IDR plans grew from $740 billion to $792 billion over the past year, a $52 billion increase of about 7%.
IDR plans now hold 62% of the dollars in the ED-serviced repayment plan universe, up from 56% in June 2025. Roughly 13 million borrowers are enrolled, up from 8.2 million unique IDR borrowers in December 2019. They represent about 45% of borrowers in repayment, deferment, or forbearance. Our income-driven repayment plan overview explains how those plans set payments.
Most of the increase comes from borrowers leaving SAVE. SAVE enrollment dropped by almost 1.2 million over the year, and many of those borrowers landed in older plans: Pay As You Earn enrollment rose from 1.3 million to 1.6 million, while Income-Based Repayment jumped from 3 million to 4 million.
It’s important to note that borrowers did not start receiving their required notices until July 1st, and FSA has not yet reported enrollment in the Repayment Assistance Plan, which launched in July 2026. We won’t get good data on RAP and updated SAVE borrower counts until next quarter.
How This Connects
These numbers line up with warnings that have been reporting on all year.
Education Secretary Linda McMahon told senators that 1 in 4 federal student loan borrowers were delinquent or in default, and the Treasury Department’s growing role means defaulted borrowers face a new debt collector with offset and garnishment tools.
Our analysis of SAVE borrowers found staying in forbearance has cost them about $3,500 each, and as that group moves into repayment, the delinquency rate among these recently enrolled borrowers will become the number to watch.
What Borrowers Behind On Payments Can Do
Borrowers who are delinquent but not yet in default can still move to an affordable plan. Enrolling in IBR or RAP resets the monthly bill to an income-based amount, and our RAP calculator estimates what that payment would be. RAP also has the big benefit of the interest subsidy and the principal reduction subsidy, which can prevent your student loan from continuing to grow as long as you make on-time, in-full payments.
Borrowers already in default have two main exits. Loan rehabilitation requires nine on-time payments over 10 months and removes the default record from credit reports, while consolidation out of default is faster but leaves the default notation in place. It’s important to note that borrowers who consolidate also limit their repayment plan choices to just RAP or tiered standard.
What’s Next
FSA’s next quarterly update, covering data through September 30, will include the first RAP enrollment figures and show how many of the 1.5 million late-stage delinquent borrowers crossed into default.
Watch the forbearance count as remaining SAVE borrowers exit, and the pace of Treasury collections, as defaulted borrowers face wage garnishment against repayment.
Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.