Federal Student Loan Debt Tops $1.7 Trillion as Defaults Rise to 9.3 Million Borrowers
The federal student loan portfolio has climbed above $1.7 trillion, while the number of borrowers in default increased by approximately 400,000 during the latest quarter, according to newly updated data from the U.S. Department of Education’s Federal Student Aid office.
Federal Student Aid’s latest quarterly reports, covering the period through June 30, 2026, show more than 9.3 million borrowers now hold $234 billion in defaulted federal student loans. Defaulted balances represent approximately 14% of the $1.64 trillion federally managed portfolio.
The figures provide a clearer picture of the federal student loan market as millions of accounts move through repayment, delinquency, and default following the pandemic-era payment pause. They also come as the Education and Treasury departments expand their joint efforts to manage defaulted federal student loans.
Federal Portfolio Exceeds $1.7 Trillion
The outstanding federal student loan portfolio covers 42.3 million recipients and totals more than $1.7 trillion, representing a nearly 4% increase in outstanding dollars compared with June 2025.
The William D. Ford Federal Direct Loan Program accounts for nearly 91% of outstanding federal student loan debt. Federal Family Education Loan Program loans account for about 9%, while Federal Perkins Loans represent less than one-sixth of 1%.
The Education Department directly manages 40.5 million recipient accounts totaling more than $1.64 trillion across Direct Loans and department-held FFEL loans.
That represents more than 95% of the overall federal student loan portfolio.
Defaults Increase by 400,000 Borrowers
The most significant movement during the quarter occurred in the defaulted portfolio.
The cumulative number of recipients in default increased by approximately 400,000 from March, reaching more than 9.3 million borrowers. Those borrowers collectively owe approximately $234 billion.
The previous March 2026 FSA update showed approximately 9 million borrowers in default with $220 billion outstanding. That means the defaulted balance increased by roughly $14 billion during the latest quarter.
The rise follows the resumption of normal repayment requirements after the extended federal student loan payment pause. According to FSA, the period between October and December 2025 was the first time many accounts could reach at least 360 days delinquent and move into default following the pause.
The pipeline of potentially defaulting accounts remains substantial. More than 80% of Education Department-serviced recipients with loans in active repayment are current, meaning they are on time or less than 31 days delinquent. However, nearly 20%, or approximately 3.5 million recipients, are more than 30 days delinquent.
FSA said approximately 1.5 million of those borrowers are in late-stage delinquency and at risk of entering default within the next six months.
Repayment and Forbearance Numbers Shift
More than 17.4 million recipients, approximately 43% of federally managed accounts, have at least one loan in active repayment or delinquency. Those borrowers hold approximately $658 billion in federal student loan debt.
The number increased slightly from March as some borrowers enrolled in the Saving on a Valuable Education, or SAVE, Plan began moving out of administrative forbearance and into repayment.
At the same time, the number of borrowers with at least one loan in forbearance fell by approximately 400,000 during the quarter to 8 million. Those borrowers account for approximately $459 billion in federal student loan debt.
FSA said it expects the forbearance population to continue declining as additional SAVE borrowers transition into other statuses.
More than 3.3 million recipients have at least one loan in deferment, representing approximately $150 billion. About 13% of recipients have loans in an in-school status, while approximately 4% have loans in a grace period.
FSA also reported approximately 13 million Direct Loan and department-serviced FFEL borrowers in repayment, deferment or forbearance are enrolled in an income-driven repayment plan.
Defaulted Loan Administration Is Moving Toward Treasury
The growing default portfolio comes as the federal government changes how it administers student loan collections.
In March, the Education and Treasury departments announced a Federal Student Assistance Partnership under which Treasury will assume operational responsibility for collecting defaulted federal student loan debt and provide support for efforts to return borrowers to repayment.
The agencies followed that agreement in September with the launch of a Defaulted Loans Support Center, an online portal designed to give borrowers information about resolving default and returning their loans to repayment.
For the accounts receivable management industry, the combination of rising defaults and the Education-Treasury transition is particularly significant. The federal government is managing a defaulted portfolio of more than $234 billion while another 1.5 million borrowers are considered at risk of default within six months.
The next several quarterly FSA releases will provide an indication of whether the default population continues expanding or begins to stabilize as borrowers transition from forbearance, enter repayment plans or resolve delinquent accounts.
FSA Also Updates Institutional and Discharge Data
The latest FSA Data Center release extends beyond portfolio balances and loan statuses.
The agency also updated data covering Public Service Loan Forgiveness, borrower defense discharges, institutions subject to heightened cash monitoring and institutional nonpayment rates.
FSA uses its Data Center as the central repository for federal student aid program and operational data, including quarterly reports covering loan portfolios, repayment plans, delinquency, defaults and other federal student aid programs.
