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(NewsNation) — Millions of Americans are falling into a financial hole that can follow them for years.
Federal student loan defaults have reached a record high as more than 9 million borrowers are severely behind in what is now a record-breaking debt crisis.
One in every five federal student loan borrowers is in default, which means they have gone more than nine months without making a required payment.
The number of defaults exploded from 5.3 million in June of last year. That’s more than $230 billion out of the $1.7 trillion federal student loan portfolio.
After a pause during the COVID pandemic, payments resumed in 2023, but a temporary safety net prevented borrowers from falling into default until the following year.
Once that financial clock started ticking again, millions ran out of time.
Default can destroy a credit score, block access to new federal student aid and eventually lead to wages or Social Security payments being garnished.
The Trump administration has temporarily held off on those forced collections. Still, another wave could be coming as borrowers are moved out of the SAVE repayment program and potentially face higher monthly bills.
Federal data also shows close to 1 million borrowers are already between six and nine months behind, putting them right on the edge of default, and student loans are difficult to discharge when filing for bankruptcy.
Also, student loans aren’t the only thing Americans are struggling to pay; many are also struggling to afford groceries.
The grocery store Giant Eagle is cutting the cost of some food this summer, and the White House says this is part of the president’s initiatives.
The regional grocery chain launched its promotion earlier this month, cutting prices on more than 300 products like ground beef and peanut butter through Labor Day.
Trump praised the company on social media, saying Giant Eagle was answering his call to lower costs for working families.
But Giant Eagle describes this as its own temporary summer promotion, not a government program, mandate or White House agreement.
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