Student loan defaults rise as delinquencies surge

The New York Federal Reserve reports a sharp jump in student loan delinquencies at the end of 2025 and student loan balances near $1.7 trillion.

The New York Federal Reserve reported a sharp increase in serious student loan delinquencies at the end of 2025, while overall student loan balances rose to roughly $1.7 trillion. The report links the rise to the end of pandemic-era payment pauses and the return of payment reporting. Many borrowers appear to be struggling with resumed payments, and federal collection activity and policy changes are in focus as a result. Officials have said some collection measures are temporarily paused while the situation is assessed. Key findings: - The share of student loan debt in serious delinquency rose to 16.19 percent in the quarter, up from 0.7 percent a year earlier. - The Fed found 9.6 percent of student loan balances were at least 90 days past due in the fourth quarter of 2025. - About one million borrowers more than 120 days behind were transferred to the U.S. Department of Education's Default Resolution Group. - As of Sept. 30, 2025, 5.2 million Americans were in default on federal student loans; 3.6 million were at least 270 days late and 3.3 million were between 31 and 270 days behind. - Total U.S. household debt rose to $18.8 trillion in the quarter, and student loan balances were reported around $1.66 trillion. Summary: Rising student loan delinquencies are reported to be contributing to household financial strain and broader increases in consumer delinquencies. Officials have announced a temporary pause on some collection actions; the next policy or procedural steps are undetermined at this time.