Student Loan Defaults Rise After Pandemic Protections End

Why it matters locally: The increase in student loan defaults nationally is likely to affect a portion of Utah's 3.4 million residents who hold federal student loans, potentially impacting household finances and local economic activity as borrowers navigate new payment obligations.

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Federal student loan borrowers have entered default in significant numbers since pandemic-era protections ended. Approximately 9.5 million individuals, or one in five federal student loan borrowers, are now in default. This status applies to borrowers who have not made payments for more than nine months. This rise in defaults follows the conclusion of temporary measures that had suspended federal student loan payments and interest accrual for an extended period.