More than 20% of college loan borrowers in Texas are in default — part of a growing national trend, according to an analysis by the Associated Press.
In total, around 878,000 Texans are in default due to college loans. That’s up by 417,000 since April 2025.
A record 9.2 million college loan borrowers are in default nationally, representing an increase of 4.2 million since April of 2025.
The latest numbers are so high in part because college borrowers could not default from March 2020 to September 2023, owing to the pandemic. Officials extended that grace period, but by October 2024, loans could become delinquent again.
"All student loans that had been in default were considered now current,” said William Chittenden, president and CEO of the Southwestern Graduate School of Banking at SMU’s Cox Business school. “So everybody was getting a fresh start. They basically took everybody in default down to zero.”
The Biden administration considered forgiving loans for college borrowers. That didn’t happen, because the U.S. Supreme court ruled the plan was unconstitutional. But Chittenden says the process took a long time, which could have fooled a lot of borrowers.
“The government's telling me I'm not going to have to pay it back,” he said. “So why shouldn't I believe them?
To be in default, a borrower must have missed a loan payment for at least nine months.
Defaults can negatively impact credit scores for decades, said C.J. Libassi, senior research associate at the PEER Center.
The government has the ability to garnish your wages, the treasury can withhold tax benefits you may be owed, and social security payments can be taken to pay off the loan.
“There’s lots of bad stuff that can happen once you’re in default,” Libassi said.
