Student loan default: Who's at risk and how borrowers can protect themselves
9.3 million student loan borrowers in default as collections threaten to resume
Published October 26, 2026
Millions of federal student loan borrowers are bracing for the possible restart of aggressive collection tactics, including wage garnishment, tax refund seizure and Social Security offsets, as the Trump Administration reportedly prepares to resume enforcement against defaulted borrowers.
Who’s at risk
Only borrowers in default, meaning at least 270 days past due on a federal student loan, can face the penalties. As of June 30, roughly 9.3 million borrowers were in default, owing $234 billion, or about 14% of the $1.7 trillion federal portfolio, according to the Federal Student Aid.
An additional 1.5 million are in late-stage delinquency. Borrowers who are current or only mildly behind are not subject to these tactics.
What the government can take
Contrary to private creditors, the federal government doesn't need a lawsuit in order to garnish up to 15% of disposable earnings, intercept tax refunds through the Treasury Offset Program, or offset benefit payments, which include Social Security. Collections are put on hold for more than six years due to the pandemic.
How borrowers can protect themselves
Those who aren't in default yet can prevent it by paying in time or enrolling on an income-based repayment plan. Those who are already in default can try one of several ways: objecting to the collections, requesting a hardship hearing, discharging loans in bankruptcy under certain conditions, or joining default resolution plans such as loan rehabilitation or consolidation of Direct loans. A new online system created by the Education Department, which was launched in September together with the Treasury, helps borrowers to file for rehabilitation or consolidation of loans.
The matter becomes important for the midterms, as delinquency rates exceed the national average in Texas and Ohio. Democrats in the Senate, led by Bernie Sanders, proposed legislation that would protect older and disabled borrowers from Social Security garnishment, but a veto is likely.
