Student loan delinquencies are spiking—here’s what borrowers can do | Earnest

Student loan delinquencies are spiking—here’s what borrowers can do now

By Corey Buhay | Published on October 21, 2025

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TL;DR

Student loan borrowers are defaulting in record numbers. When the pandemic-era student loan payment pause ended in October of 2023, millions of Americans found themselves saddled with high monthly bills for the first time in years. Many weren’t able to make the payments. When the Department of Education lifted the ban on negative credit reporting in October of 2024, a wave of delinquencies followed. The following spring, nearly a third of all borrowers were at least 90 days late on their loan payments. Many have already defaulted.

While the situation is serious, there are resources and options available. Here’s a deeper look at the current situation, plus some tips for student loan default prevention.

The current delinquency landscape

Student loan delinquency is on the rise in a big way. As of April 2025, approximately 10% of all student debt was at least 90 days delinquent. In more human terms, that’s about 5.8 million borrowers—or 31% of those with payments due. And that’s just severe delinquency. A full 34% of borrowers had payments at least 30 days late. That’s a record high.

What’s driving this surge

When the pandemic-era payment pause (and its subsequent on-ramp period) ended, many borrowers felt blindsided by the resumed payments. Broader economic pressures like inflation, stagnant wages, a feeble job market, and rising education costs have all made it harder to keep up with existing costs of living. That leaves less cash left over for hefty student loan payments.

While these economic headwinds affect millions of people, older borrowers and communities of color have been disproportionately impacted. Folks on fixed incomes have been less able to weather soaring inflationary pressures. (According to a recent Point Survey, the 90-day delinquency rate among older borrowers was 20%—double the overall rate.)

All those factors created something of a perfect storm. So, when negative credit reporting resumed, the nation was teed up for a massive surge in student loan delinquencies in 2025.

Potential consequences if delinquency continues

Late payments can trigger modest but long-lasting drops in your credit score. Defaulting results in even more severe credit impacts. According to The Guardian, more than 2.2 million borrowers have suffered a credit score drop of 100 points or more since October 2024. That could impact those borrowers’ ability to buy homes or cars, get housing applications approved, go back to school, or hit other life milestones.

Debts in default can also be sent to collections. For many borrowers, this is already a reality. On top of that, federal borrowers in default can also face wage garnishment: the federal government can direct employers to withhold up to 15% of defaulted borrowers’ pay until they’ve recouped their costs. Similarly, the federal government can withhold your annual tax refunds.

Colleges and universities face impacts, as well. Many schools risk losing access to federal aid due to high default rates. That could have ripple effects through future generations of student borrowers.

What borrowers can do now

Things are tough out there, but borrowers still have agency. Here’s what to do if your student loans are delinquent or in default:

1. Review your status & act quickly

If your loans are delinquent, you may have already received notice from your loan servicer or institution; the National Student Loan Data Center shares a list of delinquent borrowers with academic institutions each year through its NSLDS Delinquent Borrower Report. Many institutions use this list to alert affected borrowers and graduates.

If you’re not sure about your loan status, log into your Federal Student Aid account or loan servicer dashboard to check. If you find you’re delinquent, it’s time to get to work. If you act quickly, you could prevent your loans from entering default and triggering further consequences.

2. Re-enroll in or apply for a manageable repayment plan

Repayment plans, federal borrower assistance tools, and other programs all offer paths to loan rehabilitation. Consider enrolling in a federal income-driven repayment (IDR) plan, which can lower your monthly payments. These plans may also qualify some borrowers for student loan forgiveness after a certain number of years in repayment.

3. Explore forbearance, deferment, or discharge options

Forbearance and deferment also offer temporary relief by putting your payments on pause. The federal government offers the most generous options, though you’ll need to provide proof of financial hardship to qualify. The Department of Education also offers full or partial loan discharge for borrowers in extreme situations, like cases of permanent disability or the closure of a financial institution.

While not all private lenders offer deferment options, many (including Earnest) do. Reach out to your loan servicer to see what your options are.

4. Contact your loan servicer and request assistance

Even if your loan servicer doesn’t offer structured hardship options, they may be willing to work with you if you’re at risk of defaulting. As soon as you think you might miss a payment, give them a call. Ask about hardship plans, Skip-A-Payment options, and appeal processes if a previous request for deferment has been denied.

5. Seek help from trusted resources

If you’re feeling stuck, reach out to a nonprofit debt counseling agency or borrower advocacy group for help. They may be able to offer you advice, suggest a debt management plan, or direct you to default prevention resources. The Department of Education also offers a number of tools and resources—like the Loan Simulator Tool—for understanding your loans and various repayment plans.

6. Monitor your credit and rebuild

If you’ve suffered a credit score drop, student loans could be the ticket to rebuilding. The trick is to make consistent, on-time payments. This will help improve the payment history portion of your credit report, which makes up 35% of your score. Avoid missed payments, and you could see significant improvement in your credit within as little as 6 months.

In the meantime, track your credit report diligently. Dispute any errors you find, and consider credit‑builder tools like secured credit cards, credit-builder loans, or rent-reporting services to further boost your score.

7. Advocate and stay informed

The student loan landscape is constantly changing as new policies and protections come online. Keep tabs on the news, and follow student borrower networks—like Student Loan Borrower Assistance, and Inside Higher Ed—which will keep you in the loop on policy developments.

Also keep an eye on our coverage at Earnest. We’re working hard to stay on top of current developments and bring you the latest news, financial tips, and free debt management resources, like our popular Payoff Path tool.

About the Author

Corey Buhay

Corey Buhay is a writer and editor based in Boulder, Colorado. She’s passionate about literature, the outdoors, and doing her taxes by hand. She has been writing about student loans and personal finance for Earnest since 2019. You’ll find her work in Outside Magazine, Backpacker Magazine, Smithsonian, and The Denver Post.