About 9 million borrowers are in default on $220 billion of student loans, while 7.5 million SAVE enrollees are being told to pick a costlier plan

What happened

Federal Student Aid's June 23, 2026 data release reports that "approximately nine million borrowers with $220 billion in outstanding federal student loans are in default, representing more than 13 percent of the total $1.64 trillion federally managed portfolio as of March 2026," after the number in default grew by about 1.3 million in a single quarter [1].

Separately, the Saving on a Valuable Education (SAVE) repayment plan, which had more than 7.5 million enrollees, is ending under a December settlement between the Department of Education and a Missouri-led coalition of Republican states; more than 2 million borrowers had been notified by late July 2026 that they must choose another plan, Under Secretary of Education Nicholas Kent told CNN [3].

Why it matters

Default carries consequences that reach a paycheck. The department's own page says a loan holder "can order your employer to withhold up to 15% of your disposable pay to collect your defaulted debt without taking you to court," and that federal and state tax refunds and Social Security payments can be withheld through Treasury offset [2].

For SAVE borrowers, the replacement plans cost more. The Repayment Assistance Plan created by the One Big Beautiful Bill Act sets payments at 1 to 10 percent of income with a $10 minimum and cancels remaining balances after 30 years, against SAVE's payments that fell to $0 for some borrowers and forgiveness after as little as 10 years [3].

The evidence

Beyond the 9 million in default, FSA reports about 3.5 million recipients more than 30 days delinquent, including about 1.4 million in late-stage delinquency "at risk of defaulting in the next six months," out of 42.6 million recipients holding $1.7 trillion [1].

Borrowers interviewed by CNN received notices giving them 90 days to choose a new plan, one with a deadline of October 13; about 25 percent of SAVE borrowers had chosen RAP by late July [3].

Response and counterpoints

Involuntary collections are not running as of this writing. The department's collections page states that "Collections through Treasury offset and Administrative Wage Garnishment are currently paused" [2]. Money reported that the department delayed restarting garnishment and refund seizures amid record defaults and the coming repayment changes [4]. The states that challenged SAVE argued the Biden administration lacked authority to create it without Congress, and the department has described RAP as the plan Congress wrote [3].

What remains uncertain

The default figure is as of March 31, 2026, and the department has not published the June or September quarters as of our check [1]. The pause on collections is described by the department as temporary and has no published end date [2]. How many SAVE borrowers end up paying more, and how much, depends on the plan each chooses and their income; CNN's examples are individual cases, not an average [3].

Sources cited

1. [1]
   Federal Student Aid Posts Updated Reports to FSA Data Center (data through March 31, 2026) — U.S. Department of Education, Federal Student Aid, 2026-06-23.

   supports · Portfolio paragraphs: 'approximately nine million borrowers with $220 billion in outstanding federal student loans are in default, representing more than 13 percent of the total $1.64 trillion federally managed portfolio as of March 2026'; 'cumulative number of borrowers in default increased by approximately 1.3 million'; '3.5 million recipients ... more than 30 days delinquent'; '1.4 million recipients in late-stage delinquency'; 42.6 million recipients, $1.7 trillion · checked 2026-10-28 · source N-student-loan-default-01
2. [2]
   Collections on Defaulted Loans — U.S. Department of Education, studentaid.gov, 2026-10-09.

   supports · 'Collections through Treasury offset and Administrative Wage Garnishment are currently paused'; wage garnishment paragraph ('withhold up to 15% of your disposable pay ... without taking you to court'); Treasury offset paragraph (tax refunds, Social Security payments); 65-day and 30-day notice periods · checked 2026-10-28 · source N-student-loan-default-02
3. [3]
   Millions of SAVE student loan borrowers must pick a new repayment plan. Here's what they face — CNN, 2026-07-29.

   supports · Paragraphs 1-6 (more than 7.5 million enrolled in SAVE; December settlement with Missouri-led states; Under Secretary Nicholas Kent: more than 2 million notified since July 1; about 25 percent chose RAP); RAP paragraph (1 to 10 percent of income, $10 minimum, cancellation after 30 years); IBR paragraph (10 or 15 percent of discretionary income, 20 or 25 years); borrower examples (90 days to choose; October 13 deadline) · checked 2026-10-28 · source N-student-loan-default-03
4. [4]
   Wage Garnishment Delayed as Student Loan Defaults Hit Record — Money, 2026-10-10.

   context · Opening paragraphs: Education Department delayed restarting wage garnishment, benefit and tax refund collection amid record defaults and upcoming repayment reforms · checked 2026-10-28 · source N-student-loan-default-04