Pandemic-era federal student loan protections have expired, and millions of borrowers who haven’t resumed payments are facing default. At the same time, borrowers are dealing with repayment plan changes, annual income recertification and the upcoming termination of the most generous income-based repayment plan. All of these changes can result in higher monthly payments that make it difficult to stay current.
Here’s what you need to know about the student loan default cliff, when delinquency becomes more serious with default, and steps you can take to avoid defaulting on federal student loans.
[Read: Best Private Student Loans.]
The 2025 Student Loan Default Cliff
As temporary pandemic-era protections against student loan default have expired, many federal student loan borrowers haven’t resumed payments and are facing default. These expirations, combined with economic pressure and policy changes, have created a student loan default cliff, in which millions of borrowers could default.
“For a long time, those safeguards gave people breathing room, but now the clock is ticking,” says Michael McAuliffe, CEO and president of Family Credit Management. “If payments aren’t being made, defaults are just a matter of time.”
Federal student loans enter default after 270 days of missed payments, or about nine months.
From March 2020 to October 2023, most federal borrowers weren’t required to make payments during the COVID-19 payment pause. Following the payment pause, the U.S. Department of Education instituted a year-long on-ramp, during which monthly payments were required but consequences such as default and negative reporting were put on hold. The on-ramp ended Sept. 30, 2024, at which point missed payments counted toward default.
Congressional research on the student loan default cliff found that approximately 4.3 million student loan borrowers were between 181 and 270 days delinquent in June 2025, essentially with no payments since the on-ramp policy ended. If those borrowers continued to miss payments, their student loans entered default.
Those 4.3 million potential default cliff borrowers are in addition to the approximately 5.3 million borrowers who were in default as of June 2025, most of whom were in default before the COVID-19 payment pause.
Why Student Loan Defaults Could Rise in 2026
The default cliff isn’t the only challenge to student loan payments.
“There are a lot of factors that are converging to make it harder for student loan borrowers to pay off their loans, including the increasing cost of living, confusion with federal policy changes — like the SAVE plan — and a slowing job market,” says Abby Wernicki, senior director of student operations and student financial services at Colorado State University Global.
Amid payment shock after student loan payments resumed, borrowers are also facing proposed changes to the Saving on a Valuable Education repayment plan. SAVE offered low, income-driven repayment based on discretionary income and prevented interest growth with on-time payments. In December 2025, the Department of Education announced a proposed settlement agreement that would end the SAVE plan if approved by the court. Borrowers who transition to other repayment plans could face higher monthly payments.
Even borrowers who aren’t in SAVE may struggle with payments after loan changes such as repayment plan adjustments and annual income recertification. The risk of falling behind increases when monthly payments change unexpectedly or borrowers can’t reach their servicer to update their plan.
“Many borrowers saw their monthly payments increase after income recertification or after moving off temporary $0 payments that were in place during the COVID era,” says Leslie H. Tayne, finance and debt expert and founder of Tayne Law Group. “Additionally, servicers processing backlogs and being unable to get in touch with borrowers have added another hurdle, delaying or preventing borrowers from enrolling in income-driven repayment plans.”
Missed payments can accumulate quickly for borrowers who face steep payment increases from moving into different repayment options, and higher student loan payments may land on top of already-tight budgets.
“Most of us, over time, adjust our spending to match our income,” says McAuliffe. “What almost nobody is prepared for is a sudden, permanent spike in fixed expenses, which they are facing today. Combine that with ongoing inflation, and it becomes impossible for people to keep up with these payments.”
[Read: Best Student Loan Refinance Lenders.]
What Happens When You Miss Student Loan Payments
Your student loan becomes delinquent as soon as you miss a payment, and the consequences become more serious the longer your loan remains delinquent. Delinquency can result in negative credit reporting and collection activity, but reaching default (generally at 270 days of delinquency) is when it gets more serious.
“Your credit takes a major hit and collection fees can get added to the balance, making it even harder to get back on track,” says McAuliffe. “This isn’t just about missing a payment, it’s about how quickly things can snowball once you fall behind.”
Once you reach default, your entire unpaid balance becomes due, which is known as acceleration. Additional charges — including collection, processing, court and attorney fees — may be added to your balance, and you’ll lose access to federal student loan protections, including deferment, forbearance and forgiveness programs. The default status will typically remain on your credit report for seven years from the date of default.
The federal government can collect on your unpaid balance using tools including garnishment of your wages, tax refund and federal retirement payments.
“They can garnish up to 15% of your take-home pay, take your federal tax refund and even seize a portion of your Social Security payments,” says McAuliffe. “They don’t need a court order to do any of this, which catches a lot of people off guard.”
However, the Department of Education announced in January that wage garnishments were temporarily delayed until at least July, after it rolled out updated repayment plans.
Next Steps if You’re Behind on Federal Student Loan Payments
If you’re behind on federal student loan payments and concerned about defaulting, taking action can help you minimize long-term damage. Addressing the problem before you reach default is easier and less costly than allowing missed payments to accumulate and trigger consequences that are difficult to reverse.
“It is always better to communicate with your lender about your financial situation than to avoid the bill altogether,” says Tayne. “It won’t go away on its own, and a lot of the time, there is an option on the table that the borrower may not have been aware of.”
Whether you’re just checking on your loans or in serious delinquency, these actions can keep your student loans on track:
— Confirm your loan status and servicer. Log in to your Federal Student Aid account to confirm loan balances, status and your current servicer. You’ll know what you owe and who you owe it to.
— Explore repayment plan options. Visit the Federal Student Aid Loan Simulator to consider repayment options and estimate your monthly student loan payments. Then, contact your servicer to enroll in the plan that works best for you.
— Ask about servicer options. Get in touch with your servicer if you’re behind or can’t afford an updated payment. Ask what happens if you don’t pay and what options are available to get your loan into good standing.
— Use default resolution resources. If you’re already in default, you can use the Federal Student Aid default resolution resource to learn about options to get back into good standing, including loan rehabilitation and consolidation.
— Be cautious about scams. Companies that promise forgiveness or charge a fee to lower payments may be trying to take advantage of a confusing situation. You should never share your Federal Student Aid ID or login credentials or pay anyone to fill out forms, as only your loan servicer can make repayment plan changes.
“What borrowers should expect in 2026 is higher payments, more aggressive collections, more financial pressure, and more stress unless meaningful solutions are made available,” says McAuliffe. “We’re seeing people caught off guard, not because they don’t want to pay, but because they weren’t prepared for how fast the support would be pulled back. This isn’t just a financial issue, it’s a human one.”
More from U.S. News
Should You Pay Spring Tuition With a Credit Card?
Can You Pay Student Loans With a Credit Card?
What Should You Do If You Can’t Refinance Your Student Loans?
Why Student Loan Borrowers Are Falling Behind — And What To Do originally appeared on usnews.com
