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In May, the Education Department resumed debt collections for borrowers in default.
Caroline Brehman/CQ-Roll Call Inc./Getty Images
New data from TransUnion shows that nearly two million student loan borrowers are at risk of defaulting on their loans next month, The Wall Street Journal reported.
The TransUnion analysis found that as of April 2025, nearly one-third of borrowers were more than 90 days past due on their loans—a roughly 10-percentage-point jump compared to February 2025. Before the government paused payments in spring 2020 because of the pandemic, just 11.7 percent of borrowers fell into this category.
Borrowers default when they are 270 days behind on their payments. TransUnion expects about 1.8 million borrowers to default in July, followed by another million in August and then another two million in September.
Compared to data in March, the number of borrowers behind on their payments increased about one percentage point. TransUnion officials chalk that slight increase up to more borrowers becoming aware of the need to pay back their loans.
The Education Department resumed debt collections in May—the first time in more than three years that borrowers who defaulted on their loans faced the harshest consequences. Since that announcement, Education Secretary Linda McMahon and other officials have worked to spread the word about the consequences of default and defended the restart as necessary to shore up the student loan system. They’ve encouraged borrowers to get in touch with their student loan servicer and urged colleges to get involved as well.
The Trump administration did plan to withhold some federal benefits such as tax returns and Social Security checks, but officials later backed off that part of that plan.
But so far, the department has held off on restarting its automatic wage garnishment system, in which they can dock up to 15 percent of a defaulted borrower’s paycheck. The agency plans to resume that system this summer.
