How student loans and financial aid are changing in 2026

Millions of borrowers have fallen behind on their federal student loans, and the government is preparing to take aggressive steps to collect in 2026.
The federal student loan system, which has been in upheaval because of lawsuits and legislation, remains in flux. In late 2023, the federal government ended a pandemic-era pause on payments and, a year later, resumed reporting late payments to credit bureaus.
If you’re struggling to afford your monthly payments, there are steps you can take to stay current and avoid going into default, which can lead to having payments forcibly deducted from your paycheck or your tax refund. Experts recommend reviewing affordable options now and taking action if needed, to avoid potentially severe consequences.
Here’s what to know.
How many borrowers are behind on student loans?
Almost 10 million borrowers are in default, including about 3.4 million who haven’t been formally moved to the government’s program for defaulted loans, said the financial aid expert Mark Kantrowitz, according to his analysis of federal loan data as of Sept. 30. That represents about a quarter of all federal student loan borrowers. About three million more borrowers have missed payments but aren’t yet in default, Mr. Kantrowitz said.
What’s more, an additional seven million or so borrowers in the doomed SAVE plan will probably be required to choose a new plan and start repaying sooner than many expected. Payments for SAVE borrowers have been paused for more than a year because of litigation, and borrowers may struggle to readjust to making payments, said Abby Shafroth, managing director of advocacy at the National Consumer Law Center. “They’ll be at risk.”
The situation is raising concerns about a wave of fresh defaults, as borrowers also contend with high living costs, an uncertain job market and health insurance turmoil. Nearly half of borrowers said they were making trade-offs to pay both loan payments and basic needs, according to a recent survey of 1,010 federal borrowers conducted for the Institute for College Access and Success, an education research and advocacy group.
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