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The nationally representative survey of federal student loan borrowers, conducted by Data for Progress, found that 20% of borrowers currently in repayment are either delinquent or in default. Nearly half of all borrowers—45%—report making tradeoffs between loan payments and covering basic needs like rent and food.
"With how the economy is, I can barely afford to live. I have to choose between rent, loans, or putting food on the table," one survey respondent wrote.
The findings arrive as the U.S. Department of Education reported that as of October 2025, borrowers with more than $140 billion in outstanding federal student loans were in default. An additional 6.4 million borrowers were at various stages of delinquency, ranging from 30 to more than 270 days past due.
In an August data release, the Education Department itself warned of a looming "default cliff," noting that "many delinquent borrowers are in danger of defaulting in the coming months."
The survey revealed significant gaps in borrower awareness of available relief options. Fifteen percent of borrowers reported hearing "nothing at all" about income-based repayment plans, while 23% were unaware of the Public Service Loan Forgiveness program. Fewer than half knew about programs that discharge loans for borrowers with severe disabilities.
Student loan default carries severe consequences, including credit score damage, wage garnishment, and seizure of Social Security payments and tax refunds. The federal government can pursue these actions without court intervention.
The crisis disproportionately affects the most vulnerable borrowers. More than half of survey respondents received Pell Grants, indicating household incomes below $40,000 when they entered college. Prior to the pandemic payment pause, nearly 90% of borrowers who defaulted had been Pell recipients.
Borrowers who started college but didn't complete a degree face particularly steep challenges. Twenty percent of respondents with some college but no degree reported knowing nothing about income-based repayment options, compared to just 5% of advanced degree holders.
The survey also documented widespread frustration with loan servicers. While 75% of borrowers who contacted their servicer were able to resolve account issues, 48% faced long wait times, 24% received inaccurate information, and 11% believe their account balance is incorrect.
Nearly two-thirds of borrowers—58%—expressed little trust that the federal government will help keep their loans affordable. The sentiment reflects anger over recent policy reversals and the dismantling of Education Department expertise.
The situation has grown more dire as the reconciliation law passed in July 2025 overhauled the federal student loan repayment system. The One Big Beautiful Bill Act eliminates existing income-based plans for new borrowers and replaces them with a "Repayment Assistance Plan" that raises payments for most borrowers while extending repayment terms to 30 years.
The law also eliminates deferment and forbearance options for borrowers facing unemployment or economic hardship. TICAS warns these changes will likely increase delinquency and default rates.
Making matters worse, hundreds of experts have left the Office of Federal Student Aid, which administers the federal student loan program and oversees contracted loan servicers. The staff reductions have undermined the department's ability to identify servicing problems and communicate with borrowers.
Consumer credit data supports the troubling trajectory. A recent FICO analysis found the average FICO score fell two points from 2024, driven partly by resumed student loan delinquency reporting.
TICAS urged Congress to ensure the Education Department has sufficient resources to carry out its responsibilities, warning that without intervention, "there is sure to be a default disaster affecting the immediate financial well-being of millions of their constituents."
Dr. Jamal Watson is the author of The Student Debt Crisis: America's Moral Urgency.
