Tighter Student Loan Collections Loom in 2026; Struggling Borrowers Urged to Act

Millions of federal student loan borrowers are behind on payments and face more aggressive government collection efforts in 2026 as the loan system undergoes legal and policy shifts. Almost 10 million borrowers are in default, including about 3.4 million who have not been formally moved into the government’s default program, according to an analysis by financial aid expert Mark Kantrowitz.

That equals roughly a quarter of all federal borrowers, and about three million more have missed payments but are not yet in default. An additional seven million borrowers enrolled in the SAVE plan may be required to choose a new plan and resume payments sooner than expected. SAVE payments have been paused for more than a year because of litigation, and advocates warn many participants will struggle to readjust.

Rising living costs, a tight job market and health insurance instability are increasing the risk of fresh defaults. A recent survey of 1,010 federal borrowers for the Institute for College Access and Success found nearly half were making trade-offs to cover loan payments and basic needs.

Several income-driven repayment options remain available now that can lower monthly costs compared with the standard 10-year plan. Current plans include income-based repayment (I.B.R.), income-contingent repayment (I.C.R.) and pay-as-you-earn (PAYE). Borrowers are advised to use the loan repayment simulator at StudentAid.gov to check eligibility and apply online.

Key Topics

World, United States, Business, Student Loans, Debt, Repayment, Default