Timothy Varro, 40, says his roughly $120,000 in original college and law-school borrowing has grown to $375,000; despite working as an attorney, he cannot afford the $2,000 monthly minimum and fears wage garnishment.

Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, expects collections to restart and warned that borrowers who rely on tax refunds may be caught off guard.

Some states offer repayment support: Maine provides student-loan counseling and a tax credit for loan payments, while Connecticut offers tax credits to employers that help workers repay student loans.

More than 9 million borrowers are in default on $234 billion in student loans, with millions more behind on payments; after repeated pauses, wage garnishment and tax-refund seizures could resume in 2027.

The pandemic payment pause and its repeated extensions left some borrowers confused about when repayment would restart, and Preston Cooper of the American Enterprise Institute said inadequate communication meant some learned they were delinquent only after their credit was affected.

Defaults have risen sharply and vary widely by state: more than one-quarter of borrowers in Mississippi, Louisiana and New Mexico were in default, while even the states with the lowest rates reported 15%; at least 5% of loans in every state entered default in late 2025 and early 2026.

A 2025 federal report found late-payment rates as high as two-thirds at some private vocational schools, particularly in the South, while medical and health schools often had few or no defaults.

Preston Cooper supports making schools’ access to federal student loans contingent on evidence that their degrees increase graduates’ earnings.

Taylor Lewis, 26, owes $29,000 after studying media and entertainment at Kennesaw State University and now works at UPS; she says one missed payment led to default, and she cannot restore her loan to good standing without paying the full balance.