The financial pressure facing millions of Americans with student debt intensified at the end of 2025, as the share of loans entering serious delinquency climbed to its highest level on record. The latest data show a sharp rise in borrowers falling more than 90 days behind on their payments, underscoring the strain in household budgets following the full resumption of federal loan repayment obligations.

After a prolonged pandemic-era pause on federal student loan payments, repayments officially resumed in 2023. While policymakers introduced temporary on-ramps and income-driven repayment adjustments to ease the transition, many borrowers have struggled to regain financial footing. The surge in serious delinquencies during the fourth quarter suggests that the grace period is over for a significant portion of borrowers.

The U.S. student loan system—overseen primarily by the U.S. Department of Education—has undergone repeated policy shifts in recent years. Efforts to broaden debt relief and expand income-driven repayment plans were met with legal challenges and administrative hurdles. As a result, many borrowers found themselves navigating changing rules while contending with inflation, higher interest rates, and a cooling labor market in certain sectors.

Serious delinquency, defined as loans that are 90 days or more past due, can have lasting consequences. Borrowers who reach this stage risk damaged credit scores, collection actions, and in some cases wage garnishment if loans ultimately default. For younger workers, in particular, rising delinquency rates may delay milestones such as homeownership or retirement savings.

Economists note that while the broader labor market remains relatively resilient, student loan stress can amplify financial fragility among middle- and lower-income households. Monthly repayment obligations resumed at a time when consumers were already adjusting to higher borrowing costs across credit cards, auto loans, and mortgages. The compounding effect has left some borrowers choosing between debt payments and essential expenses.

The Biden administration previously sought sweeping debt cancellation measures, but the U.S. Supreme Court struck down a broad forgiveness plan in 2023, forcing the administration to pursue narrower relief programs through regulatory changes. While targeted forgiveness initiatives have moved forward for certain borrowers—such as public service workers and those enrolled in revised income-driven plans—many Americans remain responsible for substantial balances.

The rise in serious delinquency could carry implications beyond individual borrowers. Credit reporting agencies and lenders monitor student loan performance closely, and sustained deterioration may influence broader credit conditions. Policymakers in Congress are also likely to face renewed debate over repayment structures, relief programs, and long-term reforms to the higher education financing system.

For now, the record level of loans entering serious delinquency serves as a stark reminder that the end of payment pauses has ushered in a more difficult phase for borrowers. As households recalibrate their finances in a higher-cost environment, the trajectory of student loan repayment will remain a key barometer of consumer financial health in 2026.