Federal Student Loan Defaults Rise to 9.3 Million, Affecting 3.5 Million Borrowers
The number of federal student loan borrowers in default has increased by approximately 400,000 in the second quarter, reaching over 9.3 million. This data, released by Federal Student Aid (FSA), indicates that defaulted borrowers collectively owe $234 billion, which constitutes about 14% of the $1.64 trillion portfolio managed by the Education Department. As of June 30, more than 17.4 million recipients have at least one loan in repayment or delinquency, with total balances around $658 billion. While over 80% of recipients in active repayment are current, nearly 20%, or about 3.5 million individuals, are more than 30 days past due. Furthermore, approximately 1.5 million borrowers are in late-stage delinquency, putting them at risk of defaulting within six months. The 31-plus-day delinquency rate in active repayment, by dollar balance, stands at 15.7%, an increase from 12.7% in December 2019, prior to the payment pause. FSA noted that the 2019 figure marked the end of a multiyear decline in delinquency rate...