Student Loan Default Rate

Report Highlights. One out of every ten Americans has defaulted on a student loan, and 5% of all student loan debt is in default.

  • An average of 7.1% of student loans are in default at any given time.
  • 11% of new graduates default in the first 12 months of repayment.
  • $124.4 billion in student debt is in defaulted student loans.
  • Over a million student loans enter default each year.
  • Student loan default affects 9 million borrowers and their families.

Related reports include Student Loan Debt Statistics | How Do People Pay for College? | Average Time to Repay Student Loans | Average Cost of College | Economic Effects of Student Loan Debt | Student Loan RefinancingStudent loan default rate on Education Data Initiative

Student Loan Default Statistics

The student loan default rate is on the decline overall, but it affects demographics to varying degrees. Student borrowers who attended private for-profit colleges are the most likely to default on their loans, whereas private non-profit college attendees are the least likely to default.

  • 92.7% of all student loans come from the federal government.
  • 10.8% of student borrowers default on their educational loans within their first year of repayment.
  • 25% of borrowers default within their first five years of repayment.
  • 10%-20% of student loans are currently in default.
  • 15.6% of student borrowers who attended a private, for-profit college defaulted within the first year of repayment.
  • 7.1% of private non-profit college attendees default on their student loans.
  • 42.8% of borrowers with loans in default owe a debt of $20,000-$40,000.
  • 77.6% of borrowers owe $40,000 or less in defaulted student loans.
  • 1% of borrowers owe $200,000 or more in defaulted student loans.
  • Student borrowers who attended private 2-year and less-than-2-year institutions are the most likely to default on their educational loans.
  • At a rate of 26.33%, Arts and Humanities majors who attended non-selective schools are the most likely to default on their student loans.
  • 17.7% is the default rate among Black/African American student borrowers.
  • 13% and 9% are the default rates for Hispanic/Latino and White/Caucasian student borrowers, respectively.

What Happens When Your Student Loans Default

Defaulting on student loans can have long-term or even irreparable consequences.

    • The loan is immediately due in its entirety.
      Upon default, the entire outstanding balance of a borrower’s student loan comes due. This lump sum continues to collect interest and late fees.
    • You lose benefit eligibility.
      A borrower who has defaulted on a federal student loan loses eligibility for future benefits. This may include further student aid, deferment or forbearance of payment, and even tax benefits.
    • Your credit score declines.
      Defaulted student loans are reported to credit bureaus. As a result, you may not be eligible to receive other types of loans, such as home and auto loans. It can take years to undo the damage.
    • You lose income.
      Wage garnishing and withholding tax refunds are another way government and private lenders may collect on defaulted loan payments. A lender can arrange to have your employer withhold a portion of each paycheck to be paid directly to the lender.
    • You may be subject to legal action.
      In order to collect garnished wages, lenders may sue you in court. You may then also be charged for any court costs or other fees related to the lawsuit.
    • Schools may withhold your proof of attendance.
      Depending on the type of institution you attended, a school may withhold academic transcripts. It is legal for colleges to do this but not required.

How to Get Student Loans Out of Default

It is possible to restore good standing, but it may take several months or years. Some default solutions may restore benefits lost due to student loan default.

      • Repay loans immediately and in full – this is unreasonable for most student borrowers.
      • Student loan forgiveness or loan discharge may be possible with defaulted loans, such as discharges due to death or fraud.
      • Loan consolidation is the most common method indebted borrowers use to pay off loans in default.
        • Consolidating loans joins multiple loan debts, effectively giving the borrower one large loan to pay off instead of many smaller ones.
        • Loan consolidation is an option for borrowers with student loans that have been in default for 3 weeks or more.
        • Consolidation offers new opportunities for income-based and extended payment plans.
      • Loan rehabilitation may take several months while loan consolidation works faster.
        • Loan rehabilitation may remove the default record from the borrower’s history but loan consolidation does not.
        • In order to qualify for loan rehabilitation, borrowers must apply within 20 days of default.
        • A loan may only undergo rehabilitation once; if the borrower defaults again on the same loan, rehabilitation will not be possible.

Student Loan Delinquency Statistics

    • Federal student loan payments don’t go into default for 270 days or almost nine (9) months. Before that, student loan payments are considered delinquent. After 90 days of delinquency, the late payment is listed on the indebted borrower’s credit report. Most people are late making a student loan payment at least once. Among those that do, few do so habitually. The statistics below are from 2020 before the pause on federal student loan repayment due to COVID-19. 
      • 78% of student borrowers make at least one late student loan payment in their first five years of repayment.
      • 3% of student loan payments are 90+ days delinquent but not yet in default.
      • Within one year of graduation, 40.9% of student borrowers have had at least one delinquency while repaying their student loans.
      • 6.4% of indebted student borrowers have fallen behind on payments five times or more.
      • 44.7% of student borrowers who make a late payment only do so one time.
      • 32.5% of student borrowers with delinquencies have two or three late payments.
      • 15.6% of student borrowers who go into delinquency do so five times or more.
      • Student loan borrowers with law degrees are the most likely to fall into delinquency.
      • 54.4% of law degree holders are delinquent in their student loan payments at least once.
      • At 17.1%, Law degree holders are also the most likely to fall into delinquency five or more times.
      • 31.4% of law degree holders who fall behind in repaying student loans are habitually delinquent with payments.
      • 76.3% of indebted borrowers with undergraduate degrees in manufacturing, construction, repair, and transportation aren’t late to make student loan payments.


  1. National Center for Education Statistics (NCES), Baccalaureate and Beyond Longitudinal Survey
  2. NCES, Digest of Education Statistics
  3. U.S. Department of Education (ED) Office of Federal Student Aid (OFSA), Student Loan Delinquency and Default
  4. PEW Research Center, Student Loan System Presents Repayment Challenges
  5. New York Federal Reserve (NYFR), Center for Microeconomic Data
  6. NYFR, Quarterly Report on Household Debt and Credit
  7. CNBC, Surging College Loan Debt is Having an Especially Big Impact on African Americans
  8. What Is the Average Student Loan Default Rate? | Credible
  9. Who Is More Likely to Default on Student Loans? – Liberty Street Economics
  10. NYFed Student Loan Update 2022
  11. Getting Out of Default | Federal Student Aid
  12. Federal Student Loan Delinquency and Default: What to Know | Education | U.S. News.