Student Loan Crisis: $1.6 Trillion in Debt and Counting

    Student Loan 1

    Nearly Half of Student Borrowers Fail to Make Payments

    The student loan crisis in the US has reached a staggering $1.6 trillion in debt, with nearly half of the 40 million borrowers failing to make payments. After a three-year reprieve due to the pandemic, payments resumed in late 2023, but millions remain delinquent, in default, or still on pause.

    The government’s efforts to collect the debt are being hindered by court decisions and a complex web of repayment rules. This has resulted in:

    • 7 million borrowers being at least 30 days overdue on their payments, the highest delinquency rate since 2016
    • Millions more being trapped in bureaucratic snafus, unable to afford their payments or navigate the complex repayment options

    The reasons for nonpayment vary, but the consequences are clear: borrowers are struggling to make ends meet, and the government is struggling to collect the debt. President Biden has pledged to fix key parts of the troubled federal loan program, introducing the SAVE program to slash payments or reduce them to zero for low-wage workers. However, the plethora of changes to repayment rules and lawsuits from Republican-led states have worsened the already challenging task of getting borrowers back on track.

    The student loan crisis is a complex web of debt, delinquency, and bureaucratic snafus, leaving borrowers caught in the middle, trying to navigate the ever-changing repayment rules. As the government struggles to collect the debt, borrowers are left wondering when they’ll be able to escape the cycle of debt.