Student Loan Defaults Rise After Pandemic Protections End

Why it matters locally: The increase in federal student loan defaults will directly affect an estimated 37,000 Idahoans, who represent one in five federal student loan borrowers in the state. This could lead to a decrease in discretionary spending across various sectors of Idaho's economy as individuals prioritize debt repayment.

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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.