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The states with the highest student loan default rates in America are overwhelmingly Republican-leaning, according to a new Associated Press analysis.
That means in many states, the most intense financial pressures linked to education debt are hitting many of the same voters who helped return President Donald Trump to the White House.
Mississippi has the nation’s highest default rate at 28.3 percent, while Louisiana, Alabama, West Virginia, Oklahoma, Georgia, South Carolina and Texas are also among the states with the highest shares of borrowers who have fallen behind on payments.
Overall, 14 of the 15 states with the highest default rates voted for Trump in the 2024 election.
Why It Matters
Rising student loan defaults are about more than unpaid debt. Borrowers who are struggling to meet student loan obligations often have less disposable income available for home purchases, car loans, and even just making ends meet.
Student debt has also been linked to delayed homeownership and reduced consumer spending, which are two main drivers of local economic growth.
When borrowers fall behind on payments, they often see credit scores decline, making it harder to qualify for mortgages or other forms of credit. This subsequently can ripple through local businesses, from restaurants and retailers to homebuilders and car dealers.
More Americans Are Defaulting on Student Loans. Why?
The sharp increase in borrower defaults is largely tied to the end of pandemic-era student loan relief.
Federal student loan payments were paused during the COVID-19 pandemic, and borrowers were later shielded by a temporary on-ramp period that prevented delinquent loans from immediately entering default status. Once those protections expired, defaults began climbing rapidly.
“The pandemic pause suppressed defaults for 4 years. Once protections ended, borrowers got reclassified all at once,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek.
Ryan called this development “catch-up, not brand new damage.”
However, the Trump administration’s Department of Education’s decision to end the SAVE plan only exacerbated the situation for many borrowers, Ryan said.
“SAVE’s elimination is new damage. A family making $81k went from $36 monthly to potentially $440,” Ryan said. That’s teeth, and it landed hard in the South.”
According to federal data, the number of borrowers in default has surged from about 5.3 million to roughly 9.5 million since defaults resumed. That means about one in five federal student loan borrowers is in default, making up more than $233 billion in delinquent federal student debt.
“Financial issues often extend beyond party lines, and it’s possible that if defaults continue to increase, pressure could be put on lawmakers in these states to favor more legislation that looks to tackle concerns around student debt,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
Many States With the Nation’s Highest Default Rate Are Republican
The highest concentrations of defaulted borrowers are disproportionately located in Republican-leaning states, according to the AP.
The 15 states with the highest student loan default rates are:
- Mississippi
- Louisiana
- Alabama
- West Virginia
- Oklahoma
- Georgia
- South Carolina
- Texas
- Alaska
- Arizona
- Ohio
- Indiana
- Michigan
- New Mexico
- Nevada
Of those states, New Mexico was the only state not carried by Trump in 2024.
This refutes a common perception that student loan struggles are concentrated mainly in Democratic-leaning states or large metropolitan areas. Instead, many of the borrowers in distress are working-class Americans living in states that have traditionally supported Republican candidates.
“Many of these states promote their low cost of living, but that often comes with significantly lower wages,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. “My home state of Texas still has a $7.25 minimum wage, even though few employers actually pay it. The bigger issue is that incomes simply haven’t kept pace with the growing burden of student debt.”
Beene echoed this sentiment.
“The fact that some of the highest-default states for student loans are red ones is less a story about individual borrowers’ politics than about long-time economic conditions,” Beene said. “These states often have lower household incomes, more rural communities, and larger populations of borrowers who attended school but never earned a credential, which is the group most vulnerable to default.”
What to Know About Recent Student Loan Changes
The default crisis is developing as the federal student loan system continues to undergo significant changes.
The Trump administration has eliminated the SAVE income-driven repayment plan, which had offered some borrowers lower monthly payments tied to income. Borrowers previously enrolled in SAVE are being transitioned into new repayment arrangements.
While the Education Department has said this is an effort to simplify what it viewed as a fragmented repayment system, many borrowers could face higher monthly payment obligations. That puts extra financial strain on households already struggling with inflation and other expenses.
And because pandemic-era protections that temporarily prevented defaults have expired, borrowers are even more likely to face the full consequences of falling behind on payments.
“I don’t think you can pin this on one party or one policy. Deregulation, limited competition in many industries, and political tribalism have all played a role in creating the environment we see today,” Thompson said.
What Happens Next
The number of borrowers in default could continue climbing in the months ahead.
Millions of former SAVE plan participants are adjusting to new repayment options, while borrowers who have been unable to resume payments could push the student loan crisis to become a key factor ahead of November’s midterm elections, Thompson said.
“As borrowers move from the SAVE plan to the new RAP program, I expect defaults to rise, pushing more people further behind financially,” Thompson said. “Politically, I think this could become an issue in the midterms, as borrowers remember the uncertainty and higher payments they experienced.”
Contact Newsweek editors on this story: Jenni Fink and Gray R. Thomas
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