Key Points

• The Biden administration repeatedly refused to transition student borrowers back into repayment after the COVID-19 payment pause and unsuccessfully tried to cancel student debt en masse several times.
• Joe Biden’s actions meant millions of student loan borrowers became disengaged from the loan system, leaving it vulnerable to a wave of delinquencies when payments effectively resumed in October 2024.
• The Trump administration faces the challenge of transitioning 35 million borrowers back into active repayment. As of March 2025, barely one-third of borrowers not enrolled in school were making on-time loan payments.

Introduction

Thirty-five million federal student loan borrowers went back into repayment in October 2024 after the government had suspended their student loan payments, in effect, for four and a half years. Already, delinquencies have shot up, and a wave of loan defaults looms. Borrowers will feel the pain—but so will the federal budget as student loan receipts fall.

Trump administration officials face a difficult task as they negotiate the return to repayment. The prior administration did them no favors, doing little to prepare for the resumption of student loan payments and in many cases actively undermining the student loan system by promising illegal forgiveness. To understand the current repayment situation, we first need to examine how we got here.

Read the entire report here.