Amid Affordability Crisis, Analysis Finds Delinquencies Now at 3X Pre-pandemic Rates; 1 in 5 Are in Default; Delinquent Borrowers Saw Credit Scores Plummet by 57 Points on Average

February 20, 2026 | WASHINGTON, D.C. — New analysis of consumer credit data by The Century Foundation and Protect Borrowers reveals that the Trump administration’s assault on student borrowers has triggered an unprecedented nationwide delinquency and default crisis, with 1 in 4 borrowers now behind on their student loan payments, almost three times the pre-pandemic rate. Nearly nine million borrowers, or 1 in 5, are in default and at risk of eventually having their wages garnished as a result—the largest number of borrowers in default on record.

Trump’s Student Loan Delinquency Crisis, Unmasked is based on nationally representative credit panel data and finds that over the first three quarters of 2025, borrowers with delinquent student loans saw their credit scores plummet by 57 points on average, plunging three-quarters into “deep subprime” territory, raising their borrowing costs, and jeopardizing their access to credit. The report traces much of these record spikes to Trump administration policies that deliberately block borrowers from accessing Income-Driven Repayment plans they’re legally entitled to, in addition to Americans’ worsening cost-of-living crisis across the board.

Key Findings

  • Student loan delinquency has exploded to 25% of borrowers—nearly triple the 9.2% rate in 2019 before the pandemic pause. Roughly 7.9 million borrowers entered delinquency in the first three quarters of 2025 alone.
    • Delinquent borrowers have an average student loan debt of roughly $34,000. 

  • Nearly 9 million borrowers are now in default, the largest number on record. Among those moving from delinquency to default in 2025, three-quarters had never defaulted before.
    • Based on current trends, Trump’s elimination of the Saving on a Valuable Education (SAVE) plan could bring the total number of borrowers in distress to 17 million or higher. 

  • Black and Native borrowers are hit hardest, with delinquency rates near 50%. Pell Grant recipients from lower-income backgrounds face delinquency rates of 27% compared to 15% of non-Pell borrowers.
    • Delinquency rates are highest in the Southeast, e.g. Louisiana (40%) and Mississippi (39%). 

  • Delinquencies are destroying credit scores: borrowers with delinquent loans saw their credit scores plummet by 57 points on average in the first three quarters of 2025.
    • For 2 million borrowers with near-prime or better credit in 2024, their scores fell 100 points on average in 2025—from 680 to 580. 

  • This credit score destruction locks millions out of the economy: borrowers dropping from 680 to 580 will face new hurdles in securing housing and employment and can expect lifetime costs to rise by $64,000 on mortgages and $8,800 on auto loans due to higher interest rates.

  • The Trump administration has created this crisis by blocking borrowers from accessing Income-Driven Repayment plans—the safety net designed by Congress to help borrowers make affordable payments on their loans.
    • In August 2025, the administration mass rejected 328,000 IDR applications. As of December, a warehouse’s worth of 734,000 applications sat unprocessed.

“While Americans across the country increasingly struggle to pay their bills, the Trump administration is making things worse by actively pushing student loan borrowers over the edge and into default,” said Peter Granville, Century Foundation fellow and lead author of the study. “By blocking access to the very programs designed to help struggling borrowers, Donald Trump is trapping millions in a spiral of debt that is destroying their credit scores and locking them out of homeownership, buying a car, and other life milestones for years to come.” 

“Our analysis shows that working families with student debt cannot keep up with the Trump administration’s efforts to push them to the financial brink,” said Jennifer Zhang, a policy, research, and data analyst at Protect Borrowers and co-author of the study. “This administration spent the last year depriving borrowers of access to affordable repayment plans, while gutting the very agencies that help borrowers and hold servicers accountable. As a result, delinquencies hit a record high and a new borrower falls into default every 9 seconds. This is code red for working families, the affordability crisis, and the broader economy.”

By sinking credit scores, student loan delinquencies have major ramifications for borrowers’ ability to participate fully in the economy. For example, borrowers whose credit scores drop from 680 to 580 face apartment rental rejections (many require 650+ just to apply) and job denials (employers check credit). Only 1.2% of mortgages in 2024 went to borrowers with credit scores of 580 or below, compared to 13.4% for those with scores of 680 or below—effectively locking some two million borrowers out of homeownership.

Among the 7.9 million borrowers who became delinquent in 2025, one in five had never previously experienced a delinquency on any type of loan over the past decade—including 12% of borrowers aged 30 and older. This comes as families’ financial concerns worsen overall: in a June poll, The Century Foundation found that nearly half of all Americans said they would have difficulty paying an unexpected $500 bill. Relatedly, a recent survey found that 42% of student borrowers reported having to make tradeoffs between their loan payments and their basic needs.

**The full report, along with state-by-state analysis and fact sheets, is available here.**

Additional background on Trump’s actions on student loans:

→ Blocking relief. In February 2025, the Department of Education pulled down the Income-Driven Repayment application and ordered servicers to halt all processing for three months—exactly when borrowers needed help most. Even after restoring the application under legal pressure, the backlog exceeded 1 million applications. The administration mass-rejected 328,000 applications in August alone.

→ Gutting Oversight. The Office of Federal Student Aid lost 653 employees in 2025—a 42% cut—and the Trump administration gutted the Consumer Financial Protection Bureau, eliminating its student loan watchdog function. Student loan complaints surged 36%, with over 90% of borrowers reporting that their concerns were not addressed.

→ Eliminating the SAVE Plan. The Republican budget reconciliation bill, signed by Trump, repealed the most affordable repayment plan in history to pay for tax cuts for the ultra-wealthy. This forces 8 million borrowers out of the program and into much higher payments, with millions more expected to fall delinquent in late 2026 and 2027.

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About The Century Foundation

The Century Foundation (TCF) is a progressive, independent think tank that conducts research, develops solutions, and drives policy change to make people’s lives better. We pursue economic, racial, gender, and disability equity in education, health care, and work, and promote U.S. foreign policy that fosters international cooperation, peace, and security. TCF is based in New York, with an office in Washington, D.C. Follow the organization on Twitter at @TCFdotorg and learn more at www.tcf.org.

About Protect Borrowers

Protect Borrowers (formerly Student Borrower Protection Center) is a nonprofit organization led by a team of experts, lawyers, and advocates fighting to build an economy where debt doesn’t limit opportunity. We investigate financial abuses, take predatory companies to court, and push for policies to protect working people from debt traps. We aim to deliver immediate relief to families while building power, driving systemic change, and fighting for racial and economic justice.

Learn more at protectborrowers.org or follow us on social @BorrowerJustice.