Millions of student loan borrowers have recently defaulted on their loans, according to new data from the Federal Reserve Bank of New York.
Roughly 1 million borrowers fell into default during the fourth quarter of 2025, and another 2.6 million borrowers did so in the first quarter of 2026, the New York Fed reported in a blog post Tuesday.
The new defaults were concentrated among older borrowers, those in Southern states and people who were not behind on their federal student loans before the pandemic, the researchers wrote.
The researchers also said that “a second wave of defaults might emerge” as millions of borrowers who enrolled in the now-defunct Biden-era Saving on a Valuable Education plan are forced to begin repayment. A federal appeals court ended the SAVE plan earlier this year. Borrowers who signed up for SAVE have been excused from making payments since the summer of 2024.
The rise in student loan defaults comes as more borrowers must resume payments after years of relief.
