Federal Student Loan Defaults Surge, Borrowers Face Harsh Consequences
Raleigh News Today | 2 Min News | The Daily News Now! · The Daily News Now!
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Show Notes
Federal student loan defaults have surged to unprecedented levels, with an additional 3.4 million borrowers falling behind in the last quarter of 2025. The perfect storm of a COVID payment pause, dashed hopes for forgiveness, changing repayment plans, and rising costs has left borrowers struggling. Defaults can lead to severe consequences, including damaged credit scores, wage garnishment, and tax refund seizures. The SAVE plan, which offered lower payments, has been ruled unlawful and is no longer available. Borrowers must now switch to more expensive options or face wage garnishment. If youre struggling, act quickly to check your status and explore lower payment options or forbearance.
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