New FSA Data Shows 1.3 Million Uptick in Defaulted Borrowers
By Maria Carrasco, NASFAA Staff Reporter
Federal Student Aid (FSA) on Tuesday released newly updated data from 70 quarterly application, disbursement, and loan portfolio reports, showing a 1.3 million uptick in the number of borrowers in default since the last quarter in 2025.
As part of a quarterly update, FSA’s updated reports include new data from January 1 through March 31, 2026. Notably, in the latest quarter, the number of borrowers in default increased by approximately 1.3 million compared with the previous quarter (October 1 through December 31, 2025). In total, as of March 31, there are roughly 9 million borrowers in default, with $220 billion in outstanding federal student loan debt, which represents more than 13% of the total $1.64 trillion federally managed student loan portfolio.
This updated data comes as the Trump administration ramps up initiatives to bring borrowers back into repayment – including a 1% interest rate reduction if borrowers enroll in auto pay and a campaign to get borrowers enrolled in the Saving on a Valuable Education (SAVE) plan to choose another repayment plan.
Overall, FSA noted that as of March 31, the outstanding federal student loan portfolio includes 42.6 million recipients with federal student loans totaling $1.7 trillion, a roughly 4% increase from March 2025.
Other key takeaways include that over 17.2 million borrowers, or about 42% of all federally managed borrowers, have at least one loan in a current repayment or delinquency status. FSA warned that many borrowers in delinquent status are at risk of entering default in the coming months, specifically noting that 20% of recipients with loans in active repayment, or about 3.5 million borrowers, are more than 30 days delinquent on their accounts, and about 1.4 million borrowers are in late-stage delinquency, at risk of defaulting within six months.
Additionally, about 8.4 million borrowers have at least one loan in forbearance, totaling $485 billion in federal student loans. FSA noted that this is a decrease from the previous quarter, as some borrowers enrolled in the SAVE plan began transitioning out of forbearance, and that more borrowers will exit forbearance as the SAVE plan sunsets in the coming months.
Roughly 3.6 million borrowers, or 9% of federally managed borrowers, have at least one loan in deferment totaling $157 billion.
The updated reports also include new data on institutional nonpayment rates, which differ from cohort default rates. Last summer, FSA first released institutional nonpayment rates, which are the percentage of Direct Loan borrowers who entered repayment since January 2020 and whose federal student loans were more than 90 days delinquent at the time the data were collected; in this quarterly report, the data are as of May 2026.
In this new data, approximately 2,000 institutions have nonpayment rates at or exceeding 25%, an increase of roughly 200 institutions since the February 2026 report, FSA noted.
With this new data, FSA does note that its recent student loan data is not comparable to prior years because of the three-and-a-half-year payment pause from the Covid-19 pandemic, along with the implementation of programs such as the on-ramp and Fresh Start.
FSA also provided new data on the usage of income-driven repayment (IDR) plans. According to FSA, approximately 13 million Direct Loan and ED-serviced FFEL borrowers in repayment, deferment, or forbearance statuses are enrolled in an IDR plan. Within the past year, the number of Direct Loan and ED-serviced FFEL balances in IDR plans increased from $728 billion to $784 billion.
Publication Date: 6/25/2026
You must be logged in to comment on this page.