The Dispatch
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An “unprecedented number” of student loan borrowers are poised to default as the cost of living rises, according to a new survey from The Institute for College Access and Success.
More than four in ten borrowers report making tradeoffs between loan payments and covering their basic needs, and 37% say their loans have hurt their ability to cover health care costs for themselves or their family, the survey found.
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One in five borrowers report their loans are currently in delinquency or default — meaning they are behind on payments — including one-third of people with some college but no degree. (The survey was of 1,010 borrowers, and responses were collected in September 2025.)
‘Fewer resources than ever’
“Ultimately, borrowers today have fewer resources than ever to navigate their repayment options, and those options are ever shifting,” Michele Zampini, associate vice president for federal policy and advocacy at TICAS, wrote in a blog post late last week.
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Zampini pointed to the Trump administration’s move to gut the Education Department and lay off hundreds of experts in the Office of Federal Student Aid. Loan servicers are also struggling to comply with changes to the repayment system, Zampini added.
Congress overhauled student loan repayment in the One Big Beautiful Bill Act over the summer. They eliminated access to all existing income-based repayment plans and replaced them with a plan that raises payments for most borrowers and extends the maximum repayment term to 30 years from the current 10-25 years. The law also eliminated deferment and forbearance options for borrowers facing financial hardship.
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“Taken together, these changes will likely make it harder for low- and middle-income borrowers to keep up with their monthly payments, which could lead to increased delinquency and default rates once they go into effect,” Zampini wrote.
SAVE settlement could make situation worse
Yesterday the Trump administration reached a settlement with several states over the SAVE program, a Biden-era student loan relief effort. As part of the settlement, the Education Department won’t enroll any new borrowers in SAVE and will deny pending applications.
Alexander Lundrigan, higher education policy and advocacy manager at the advocacy organization Young Invincibles, pointed to the TICAS survey in comments panning the settlement.
“At a time when everyone is talking about the cost of living, this administration eliminated the most affordable repayment plan in history,” he said. “Data shows we are headed toward mass default rates in the near future. Without an affordable repayment option, the situation will only get worse.”
The more than 7 million borrowers currently enrolled in SAVE will face higher monthly payments and could lose out on progress toward loan forgiveness, Zampini said in a statement yesterday. The settlement creates uncertainty for borrowers and leaves key questions unanswered, she said.
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