The Century Foundation
Nearly one in four student loan borrowers with a payment due is now delinquent — almost triple the pre-pandemic rate — as the Trump administration's rollback of borrower protections has triggered what researchers are calling an unprecedented default crisis, according to a new report released this week.
The analysis, conducted by The Century Foundation and Protect Borrowers, found that roughly 7.9 million borrowers entered delinquency during the first three quarters of 2025, with the overall delinquency rate climbing to 25 percent — up from 9.2 percent before the pandemic payment pause. Nearly 9 million borrowers, or one in five, are now in default, the largest number on record.
The report traces much of the crisis to deliberate policy decisions by the Trump administration that effectively barred millions of struggling borrowers from accessing income-driven repayment (IDR) plans — federal programs designed by Congress to cap monthly payments at affordable levels based on a borrower's income.
In February 2025, the Department of Education halted all processing of IDR applications for three months, the precise window when borrowers were scrambling to avoid delinquency. The department only restored the application portal after being sued by the American Federation of Teachers. Even then, the backlog ballooned to more than 1 million unprocessed applications at one point. In August, the department mass-rejected 328,000 applications; as of Dec. 31, 734,000 applications remained unprocessed.
"While Americans across the country increasingly struggle to pay their bills, the Trump administration is making things worse by actively pushing student loan borrowers over the edge and into default," said Peter Granville, a Century Foundation fellow and lead author of the study.
The financial damage extends well beyond missed payments. Borrowers with delinquent loans saw their credit scores drop by an average of 57 points over the first three quarters of 2025, plunging three-quarters of them into "deep subprime" territory. For approximately 2 million borrowers who held near-prime or better credit scores in 2024, the drop averaged 100 points — from 680 to 580.
