22% of Texans' student loans are in default
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A record 9.5 million people across the U.S. were in default on their federal student loans as of March, per the Associated Press.
Why it matters: The Trump administration implemented a slew of changes to student loans earlier this month, including fewer repayment options, tighter borrowing caps and potentially higher repayments for some borrowers.
- The changes came in the midst of U.S. student loan debt hovering around $1.7 trillion and many borrowers delaying life events and financial goals such as saving for retirement, buying a home or getting married because of their debt.
Stunning stat: In Texas, around 22% of federal student loan borrowers were in default as of March. That's around 878,000 Texans, per KERA.
Context: The Department of Education considers borrowers to be in default if they miss payments for nine months.
- Defaulting on a student loan can result in tax refund or wage withholding, lower credit and demands from the loan servicer to immediately pay the remaining balance and interest.
- The Department of Education has temporarily delayed garnishing wages or withholding tax refunds on defaulted student loans.
What they're saying: "Folks are struggling to make ends meet and cover all the rising costs of everything else. The growing student loan bills are making things worse and folks are falling behind," Aissa Canchola Bañez of the advocacy group Protect Borrowers tells the AP.
Pro tip: If you have student loans in default, the Institute for College Access & Success has this advice on what to do next.