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LOCALIZE IT: Student loan defaults are surging as repayment policies change. View your state's data

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LOCALIZE IT: Student loan defaults are surging as repayment policies change. View your state's data
News

News

LOCALIZE IT: Student loan defaults are surging as repayment policies change. View your state's data

2026-07-21 00:13 Last Updated At:14:47

EDITORS/NEWS DIRECTORS:

New federal student loan data show the payment restart has produced a new wave of borrowers falling into default.

After a three-year pandemic payment pause and a one-year “on ramp” that temporarily shielded borrowers from the harshest consequences of missed payments, scheduled payments became mandatory again in late 2024. By mid-2025, borrowers who never resumed payment began to slip into default. Many more joined them in the months that followed.

AP’s analysis of Office of Federal Student Aid data finds that, following the pause, the group of defaulted borrowers grew by 4.2 million by March 2026, pushing the national total to about 9.5 million borrowers. That’s above the pre-pandemic peak of 8 million in December 2019. Default occurs after borrowers miss payments for an extended period, making them subject to penalties such as wage garnishment.

Hundreds of thousands more are months behind on payments, and another surge in defaults could be on the way.

Millions of borrowers are facing higher monthly payments as the government dismantles its most affordable income-driven repayment option, the SAVE plan, one of several changes the Education Department says are intended to simplify a fragmented system.

The AP tracked loan data produced by the Office of Federal Student Aid and formatted it for use in state-level reporting on these topics. Here is an overview of our data analysis and tips on using it in local reporting.

This guide features publishable lines for states that stand out in our data: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Indiana, Louisiana, Maryland, Mississippi, Nevada, New Hampshire, New Mexico, North Carolina, Oklahoma, Puerto Rico, South Carolina, Texas, U.S. Virgin Islands, Washington, D.C.

READ AP'S COVERAGE

As defaults on student loans surge, millions are trying to get their lives back on track

A wave of student loan borrowers have entered default since pandemic-era protections lapsed

DATA INCLUDED IN THE ANALYSIS

The data is sourced from the Office of Federal Student Aid (FSA). The FSA updates its Federal Student Loan Portfolio dataset quarterly. The AP has curated and analyzed defaulted borrower numbers, as well as non-payment rates by school, for state-level reporting:

— Our defaults data includes the number of borrowers and their balances, representing all federally managed loans that are delinquent by more than 270 days. At the state level, defaulted loans are defined as delinquent by more than 360 days. For more information on why the default timing differs at the state level, visit the README in the AP's curated dataset.

— Nonpayment rates pertain to borrowers with direct federal loans that entered repayment status between January 2020 and May 2025. The rate reflects the percentage of those borrowers who were more than 90 days late on payments by the end of May this year, including those in default.

FIND THE DATA TO TELL THE STORY IN YOUR STATE

Here is a link to the AP’s curated data. AP has compiled the most useful state-level data into four spreadsheets:

DEFAULT DATA

— Total defaulted borrower counts and outstanding balances by quarter through March 2026.

— State-level defaulted borrower counts and outstanding balances at the end of March 2026.

NONPAYMENT

— Nonpayment rates by school with data through May 2026.

— State-level nonpayment rates with data through May 2026.

KEY TAKEAWAYS: DEFAULTS
State-level defaults data reflect borrowers’ current state of residence. Use these data to report how many borrowers in your state are in default and how much they owe. High default rates can affect local economies because such borrowers often have low credit scores and may face federal collection efforts such as wage garnishment.

— The group of borrowers in default — more than 270 days late on payments — has grown by 4.2 million since the pandemic payment pause ended.

— The majority of borrowers in default are more than 360 days late on payments. From the end of the payment pause to March this year, this group of borrowers alone had grown by about 3.7 million. This surge was largest in Mississippi, Louisiana, Alabama, Puerto Rico, Texas, Nevada, Indiana, Delaware, Ohio and Arizona. In each of those states, the local increase represented at least 10% of borrowers. Here are publishable lines for the states:

Since the pandemic pause ended, the number of borrowers living in Louisiana who are more than 360 days delinquent has grown by 92,000, bringing the total to 187,000, or 27% of residents with loans.

Since the pandemic pause ended, the number of borrowers living in Mississippi who are more than 360 days delinquent has grown by 57,000, bringing the total to 129,000, or 28% of residents with loans.

Since the pandemic pause ended, the number of borrowers living in Alabama who are more than 360 days delinquent has grown by 77,000, bringing the total to 169,000, or 25% of residents with loans.

Since the pandemic pause ended, the number of borrowers living in Puerto Rico who are more than 360 days delinquent has grown by 39,000, bringing the total to 104,000, or 31% of residents with loans.

Since the pandemic pause ended, the number of borrowers living in Georgia who are more than 360 days delinquent has grown by 191,000, bringing the total to 396,000, or 23% of residents with loans.

Since the pandemic pause ended, the number of borrowers living in South Carolina who are more than 360 days delinquent has grown by 86,000, bringing the total to 182,000, or 23% of residents with loans.

Since the pandemic pause ended, the number of borrowers living in North Carolina who are more than 360 days delinquent has grown by 146,000, bringing the total to 296,000, or 21% of residents with loans.

Since the pandemic pause ended, the number of borrowers living in Texas who are more than 360 days delinquent has grown by 417,000, bringing the total to 878,000, or 22% of residents with loans.

Since the pandemic pause ended, the number of borrowers living in Nevada who are more than 360 days delinquent has grown by 38,000, bringing the total to 93,000, or 25% of residents with loans.

Since the pandemic pause ended, the number of borrowers living in Arizona who are more than 360 days delinquent has grown by 94,000, bringing the total to 232,000, or 25% of residents with loans.

Since the pandemic pause ended, the number of borrowers living in Delaware who are more than 360 days delinquent has grown by 14,000, bringing the total to 29,000, or 21% of residents with loans.

Since the pandemic pause ended, the number of borrowers living in Indiana who are more than 360 days delinquent has grown by 90,000, bringing the total to 212,000, or 24% of residents with loans.

KEY TAKEAWAYS: NONPAYMENT RATES
Nonpayment rates measure where borrowers attended school, not necessarily where they currently live. The Education Department considers high nonpayment rates an early warning sign that schools may develop higher default rates. Use the aggregate state-level data to compare nonpayment rates across all schools or by sector — public, private nonprofit and for-profit — and the institution-level data to identify the colleges driving trends in your state.

— At least 1 in 5 borrowers were 90 or more days late on payments in 14 states, the U.S. Virgin Islands and Puerto Rico:

Among schools in Alaska, about 5,400 borrowers — about 27% — were late on payments.

Among schools in Louisiana, about 83,300 borrowers — about 26% — were late on payments.

Among schools in the U.S. Virgin Islands, about 300 borrowers — about 26% — were late on payments.

Among schools in Connecticut, about 62,100 borrowers — about 25% — were late on payments.

Among schools in Puerto Rico, about 38,200 borrowers — about 24% — were late on payments.

Among schools in Arizona, about 205,200 borrowers — about 24% — were late on payments.

Among schools in Florida, about 222,100 borrowers — about 23% — were late on payments.

Among schools in Oklahoma, about 45,100 borrowers — about 23% — were late on payments.

Among schools in Washington D.C., about 41,400 borrowers — about 23% — were late on payments.

Among schools in Texas, about 275,900 borrowers — about 22% — were late on payments.

Among schools in New Hampshire, about 65,800 borrowers — about 22% — were late on payments.

Among schools in Colorado, about 77,900 borrowers — about 22% — were late on payments.

Among schools in Mississippi, about 33,900 borrowers — about 21% — were late on payments.

Among schools in Arkansas, about 33,300 borrowers — about 21% — were late on payments.

Among schools in Georgia, about 105,400 borrowers — about 21% — were late on payments.

Among schools in New Mexico, about 10,900 borrowers — about 20% — were late on payments.

— Borrowers who attended for-profit schools were the most likely to miss their scheduled payments. At for-profit schools, about 1 in 3 borrowers were behind on payments compared to about 1 in 6 at public colleges.

— Among for-profit schools, non-payment rates are largest in Oklahoma, Maryland, Connecticut, North Carolina and Louisiana. In each of those states, at least 40% of borrowers who attended for-profit schools were late on their payments:

About 13,100 borrowers who attended for-profit schools in Oklahoma — 48% — were late on payments.

About 14,200 borrowers who attended for-profit schools in Maryland — 45% — were late on payments.

About 44,900 borrowers who attended for-profit schools in Connecticut — 43% — were late on payments.

About 7,700 borrowers who attended for-profit schools in North Carolina — 42% — were late on payments.

About 23,200 borrowers who attended for-profit schools in Louisiana — 41% — were late on payments.

— While nonpayment rates tend to be lower at public colleges, they enroll many more borrowers. As a result, these borrowers make up a larger proportion of borrowers behind on payments. Around 45% of nonpaying borrowers attended public schools compared to 31% at for-profit schools.

— Among public colleges, non-payment rates are largest in the U.S. Virgin Islands, Louisiana, Washington D.C., Mississippi and Arkansas. In each of those states, at least 20% of borrowers who attended public colleges were late on their payments:

About 300 borrowers who attended public schools in the U.S. Virgin Islands — 26% — were late on payments.

About 55,200 borrowers who attended public schools in Louisiana — 24% — were late on payments.

About 700 borrowers who attended public schools in Washington D.C. — 24% — were late on payments.

About 28,800 borrowers who attended public schools in Mississippi — 22% — were late on payments.

About 26,100 borrowers who attended public schools in Arkansas — 20% — were late on payments.

— Among private colleges, non-payment rates are largest in West Virginia, South Carolina, Alabama, New Hampshire, Florida, Arizona and Arkansas. In each of those states, at least 20% of borrowers who attended private schools were late on their payments:

About 4,300 borrowers who attended private schools in West Virginia — 27% — were late on payments.

About 12,000 borrowers who attended private schools in South Carolina — 24% — were late on payments.

About 8,800 borrowers who attended private schools in Alabama — 24% — were late on payments.

About 60,100 borrowers who attended private schools in New Hampshire — 23% — were late on payments.

About 73,900 borrowers who attended private schools in Florida — 22% — were late on payments.

About 43,900 borrowers who attended private schools in Arizona — 21% — were late on payments.

About 4,200 borrowers who attended private schools in Arkansas — 20% — were late on payments.

CONSIDER THESE REPORTING THREADS

— Talk with students in your communities who have defaulted on student loans. Were they in a plan that was recently discontinued? How did they fare when payments resumed? What kinds of financial challenges have they faced? Are they older, with retirement looming? Are they trying to raise small children while paying off loans? Are the loans stopping them from saving for a house or making other purchases?

— Investigate what types of people are most likely to have entered default in recent months.

— Check on the default rates of trade schools, community colleges, public universities and for-profit schools in your areas; compare different types of institutions. Do certain institutions stand out? Why are the rates higher at some schools versus others? Why are borrowers from certain colleges struggling more than those from peer institutions? Investigate schools with unusually high nonpayment rates.

— Ask schools what they’re doing to keep borrowers out of default. Do they provide financial counseling, repayment guidance or outreach to former students? Have those efforts changed since payments resumed?

— Reach out to elected officials in your state and ask about the issue. What do they think should be changed? Are there any innovative solutions in your state to address these trends?

— Examine the local economic impact. What do business leaders, employers, consumer advocates and economists say? Are they worried that student loan repayment could be a drag on the economy? Are workers delaying career changes, additional education or relocation because of repayment obligations?

READ ADDITIONAL AP COVERAGE

Changes to student loans are taking effect July 1. Here’s what to know

The Trump administration says it is cutting student loan interest. Here are some facts and context

Nursing gains ‘professional’ label for student loans after judge’s ruling, but theology now dropped

Judges strike down Trump administration’s overhaul of student loan forgiveness program

Money Happens: Tips for dealing with student loan debt when it affects your mental health

Dropped out? Colleges are helping students reenroll to finish degrees

The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

Localize It is a resource produced regularly by The Associated Press for its customers’ use. Questions can be directed to the Local News Success team at localizeit@ap.org. View guides published in the last 30 days here.

FILE - The U.S. Department of Education building is photographed in Washington, Dec. 3, 2024. (AP Photo/Jose Luis Magana, File)

FILE - The U.S. Department of Education building is photographed in Washington, Dec. 3, 2024. (AP Photo/Jose Luis Magana, File)

Barbara Howaniec, a psychiatric nurse practitioner, poses for a photo in her office on Monday, June 15, 2026, in Portland, Maine. (AP Photo/Robert F. Bukaty)

Barbara Howaniec, a psychiatric nurse practitioner, poses for a photo in her office on Monday, June 15, 2026, in Portland, Maine. (AP Photo/Robert F. Bukaty)

NEW YORK (AP) — Stocks fell on Wall Street Wednesday as the price of crude oil rose back above $100 a barrel amid further escalation in the U.S. war with Iran.

The S&P 500 index fell 0.5%. The Dow Jones Industrial Average fell 413 points, or 0.8%, as of 12:07 p.m. Eastern time. The Nasdaq composite fell 0.7%.

The losses were broad, with retailers among the companies leading the market lower. Amazon fell 2.2% and Starbucks fell 2%. Nearly every sector within the benchmark S&P 500 lost ground, but oil companies pushed higher. Exxon Mobil rose 1.7% and Chevron rose 1.4%.

Oil prices drove much of the action on Wall Street. The U.S. destroyed five Iranian tankers on Tuesday in a series of attacks between the two nations. The conflict that began in February has essentially shut down traffic in the Strait of Hormuz, where a fifth of the world’s oil supply passed before the war began.

The price of Brent crude, the international standard, rose 3.4% to $101.24 a barrel. It marks the first time the price surpassed $100 a barrel since July.

The jump in oil prices over the course of the war has fueled already high inflation. Gasoline prices in the U.S. are up about 32% from a year ago to $4.22 per gallon. Higher fuel prices cut into household budgets directly when it comes to the cost of driving, but they also indirectly raise prices for goods because of higher shipping costs.

The price of diesel, which can have an outsized impact on consumers because it is used in shipping and production, hit an all-time high Friday and has continued to climb since. The average price for a gallon reached $5.94 overnight and is now 9 cents higher than it was Friday.

Inflation was already stubbornly high when the U.S. started its war against Iran because of the ongoing U.S. trade war with much of the world. That trade war is also heating up, especially between the U.S. and its close ally and trade partner Canada.

Wall Street will get more updates this week on inflation, starting with a look at prices at the wholesale level on Thursday with the release of the Producer Price Index for August. It measures prices businesses pay for goods before they reach customers. That report will be followed up Friday with the release of the Consumer Price Index, or CPI, for August, which shows the more direct price impact for households.

The latest reports are expected to show that the rate of inflation remains above 3%. That has been an issue for the Federal Reserve, which is aiming to hold inflation at a target rate of 2%. The central bank has been holding rates steady, but Wall Street is leaning toward a 62% chance that it will raise its benchmark interest rate at its meeting next week, according to data from CME Group.

Higher interest rates make borrowing more expensive. The goal of raising interest rates is to slow the economy and cool inflation.

Rising Treasury yields in the bond market were also weighing down stocks on Wall Street Wednesday.

The U.S. Treasury Department on Wednesday said it would buy back up to $6 billion in long-term debt. That follows an announcement in August previewing plans for an unusually large buyback in an effort to contain rising yields, which make it more expensive for U.S. companies to borrow money and also weigh down other investments, such as stocks.

Bond yields had been holding steady prior to the announcement, but gained ground shortly after.

“The simplest version here is that market interventions have a long history of not working very well," said Guy LeBas, chief fixed income strategist at Janney Montgomery.

The yield on the 10-year Treasury, which tends to impact mortgage rates, rose to 4.85% from 4.80% late Tuesday. The yield on the 2-year Treasury, which tends to track expectations for Fed moves on interest rates, rose to 4.42% from 4.39% late Tuesday.

Bond yields have an inverse relationship to prices. Yields rise as bond prices fall. Rising yields signal that investors are demanding a higher return from Treasurys.

Elsewhere on Wall Street, shares of Meta Platforms rose 6.5% as the parent company of Instagram and Facebook launched a personal artificial intelligence agent, Muse, for people 18 and over who are looking for help with day-to-day tasks like schedules and shopping.

Markets in Europe fell while markets in Asia closed mixed.

AP Business Writers Yuri Kageyama and Michelle Chapman contributed to this report.

Specialists Dilip Patel works on the floor of the New York Stock Exchange, Thursday, Aug. 27, 2026, in New York. (AP Photo/Yuki Iwamura)

Specialists Dilip Patel works on the floor of the New York Stock Exchange, Thursday, Aug. 27, 2026, in New York. (AP Photo/Yuki Iwamura)

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Sept. 9, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Sept. 9, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei and New York Dow indexes at a securities firm Wednesday, Sept. 9, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei and New York Dow indexes at a securities firm Wednesday, Sept. 9, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Sept. 9, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Sept. 9, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

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