By Jacquelyn Burrer, The Dallas Morning News
DALLAS — With many borrowers struggling to keep up with rising household costs, more are falling behind on their federal student loan payments.
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At least one in five borrowers are in default, meaning they are at least 270 days behind on payments, according to Federal Student Aid data analyzed by The Dallas Morning News.
Whether you’re in default on your federal student loans or expect to be soon, here’s what you need to know.
Why are borrowers defaulting on their student loans?
There are many reasons people may be defaulting on their federal student loans, said Betsy Mayotte, president of The Institute of Student Loan Advisors. The nonprofit provides free student loan advice and dispute resolution assistance to borrowers nationwide.
Mayotte said borrowers may be struggling to make their student loan payments again after the federal government issued yearslong pauses on collections and implemented new policies and repayment plans.
“The people least likely to default are the people in the habit of making their student loan payment,” Mayotte said. “These people are going back into repayment at a time when their health care premiums are higher, gas prices are higher (and) groceries are a lot higher.”
The new federal spending bill that was signed into law in July 2025 also made several changes to federal student loan payment plans that Mayotte said could contribute to borrowers being in default in the future. For instance, borrowers on the Save on A Valuable Education plan, or SAVE, were notified July 1 to switch repayment plans within 90 days.
“Things are just so confusing, and borrowers don’t know what they don’t know,” Mayotte said.
Mayotte said while new repayment plans were introduced, consumers planned their monthly budgets based on what they were paying under SAVE and could be in danger of defaulting.
“A lot of what I’m seeing is, ‘I was told my payment was going to be X under SAVE, so we budgeted a mortgage or we budgeted for our rent,’” Mayotte said. “There’s no take backsies on those things.”
Mayotte said she expects to see more borrowers default, such as individuals who took out Parent PLUS loans, within the next year as various July 1 changes begin to affect borrowers.
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“We still have another million-point-something people in the pipeline that are headed for default,” Mayotte said.
What happens if you default on your student loans?
Missing a payment doesn’t automatically mean you’re in default. Mayotte said borrowers become delinquent the day after payment is due if it wasn’t paid.
Federal student loans enter default at 270 days, or just under nine months, without a payment. Once a student loan enters default, borrowers can face additional costs, including wage garnishment or damaged credit.
“Default is almost always going to be more expensive in both the immediate and the long-term of the loans,” Mayotte said.
Although the government is not currently garnishing wages for borrowers in default, Mayotte said that doesn’t mean it can’t start again. Borrowers should be sent a notice ahead of time before any penalties are enforced, Mayotte said.
What should I do if I’m in default on my student loans?
If you are in default on your federal student loans, Mayotte said to contact your loan servicer as soon as possible. Borrowers who hit day 270 or higher may still have a chance to resolve it, but they have to call their loan servicer.
Depending on the situation, resolving it could include making enough payments to bring the loan below the default threshold or applying for forbearance if eligible.
Mayotte recommends reviewing the options available on studentaid.gov prior to speaking to your loan servicer. Individuals seeking assistance can also find more resources on The Institute of Student Loan Advisors’ website.
“There are ways out of default,” Mayotte said. “Whether they’re delinquent or in default, there is almost always a solution.”
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