9.5 Million U.S. Student Loan Borrowers in Default as Portfolio Tops $1.7 Trillion

Key Facts

The reported appointment by the U.S. Treasury Department of debt collectors to pursue borrowers in default could not be verified. The step was attributed in a report dated November 12 to President Donald Trump's administration. In the absence of reliable, publicly available confirmation of the event and its timing, a resumption of hiring after a six-year pause cannot be treated as established news. The volume of loans in default, however, remains substantial in data published in 2026. The Associated Press reported on July 20 that about 9.5 million borrowers were in default, equivalent to one in five federal borrowers. That scale puts collections at the center of scrutiny of the U.S. student loan portfolio.

According to the same report, the balance of student loans in default was $233.3 billion, out of $1.7 trillion in federally backed loans. The figures illustrate the scale of defaults within a broad federal lending portfolio, but do not in themselves establish that new collection action was taken in November. In more recent data, the Federal Student Aid office said the outstanding portfolio included 42.3 million recipients as of June 30, 2026. Their loans totaled more than $1.7 trillion, up about 4% in value from June 2025. The data point to growth in the portfolio's total value over the year, while the Associated Press figures on defaults are dated to July.

The Associated Press said borrowers began returning to default in June 2025, after the end of the relief period that followed the suspension of payments during the pandemic. By March 2026, the number of borrowers with loans in default had increased by more than 4.2 million compared with April 2025, according to another report by the news agency. The agency places the increase in the context of defaults returning after a pandemic-related pause, not as evidence of an effect from the reported hiring of collectors in November. The previous record for the number of borrowers in default was 8 million in December 2019, according to the same report. The July 2026 estimate of about 9.5 million exceeds that earlier level.

Federal Student Aid guidance on collecting defaulted debt allows an order to be issued to a borrower's employer to withhold up to 15% of disposable pay, without going to court. The agency explains that this administrative process allows the debt to be collected by withholding part of the borrower's pay, subject to the cap set out in the guidance. The rule alone does not establish that the department launched a new campaign or hired debt collectors on the date attributed to the November 12 report. The proposed compensation for debt collectors, as well as the motives and effects attributed to the alleged step, could not be verified. Published data on defaults and the size of the portfolio remain the available basis for tracking the issue.