The landscape for U.S. student‑loan borrowers is changing quickly. After years of payment suspension during the pandemic, delinquency rates are climbing—and at the same time, the Trump administration is altering key aspects of forgiveness and repayment programs, creating a two‑fold shift for millions of Americans.

The delinquency numbers

According to the Federal Reserve Bank of New York, in the first quarter of 2025 about 7.74% of aggregate student‑loan debt was reported at least 90 days past due, compared to less than 1% in the fourth quarter of 2024.  

By the second quarter, that serious‑delinquency figure rose to roughly 10.2%.  

Meanwhile, data from TransUnion show that among federal student‑loan borrowers with a payment due, around 20.5%were 90 + days past due as of February 2025.  

These are the highest levels on record, reflecting how the end of the moratorium and the return of reporting of missed payments have revealed considerable strain.

Policy‑shifts under the Trump administration

At the same time the numbers are rising, federal policy is evolving. The Trump administration has taken steps to restart interest charges for certain borrowers: for example, borrowers in the SAVE Plan—an income‑based repayment plan initiated during the previous administration—have been told that interest will resume as of August 1, 2025.  

In another major move, the administration reached an agreement to resume debt‑cancellation for about 2.5 million borrowers eligible under certain income‑driven repayment plans, after a lawsuit by the American Federation of Teachers (AFT).  

This dual dynamic—rising delinquencies and shifting forgiveness/repayment rules—puts borrowers in a complex and riskier environment.

What it means

For borrowers who have been living in a payment‑suspension era, the resumption of full obligations is exposing some fragility. Missed payments that were hidden during the relief period are now appearing on credit reports and being counted in delinquency statistics. That has consequences: a delinquent status can reduce access to future credit, raise borrowing costs, and lead to wage garnishment or other collection actions.  

From a policy and lender perspective, this shift suggests rising risk in the student‑loan portfolio. The high delinquency flow may lead to increased defaults, losses, or stricter underwriting for future borrowers.

For the broader economy, elevated student‑loan stress among younger workers or recent graduates may reduce consumption, delay home buying or other major financial decisions, and exert drag on growth.

Editorial view

It’s clear that what we are seeing is not a sudden meltdown—but it is a significant and potentially troubling turn. The payment‑pause era masked underlying burdens; now that cloak is being lifted. The interplay of policy change and borrower behavior means we are entering a new phase of repayment stress.

The Trump administration’s choices around forgiveness and repayment plans complicate the picture further. On one hand, restoring cancellation for certain eligible borrowers signals relief; on the other, restarting interest and modifying program eligibility adds uncertainty. In that sense, the policy toward forgiveness isn’t purely expansionary—it’s recalibrated, and borrowers may be left navigating more complexity rather than cleaner solutions.

From my viewpoint, the most important thing to watch is how many borrowers move from serious delinquency into default, and how long those trends persist. Also worth watching: borrowers in risk categories (low income, older age, non‑traditional careers) and how regulatory changes affect their access to relief.

Bottom line: Student‑loan delinquencies are rising sharply as payment obligations resume and major policy changes roll out. Borrowers face a tougher environment; the lending and policy worlds are shifting; and for many, the path from debt to relief—or even manageable repayment—is becoming less certain.