Student loan defaults have surged to an all-time high of 9.52 million, according to an Associated Press analysis of Office of Federal Student Aid data. Defaults grew by about 4.2 million since June 2025, when borrowers were again allowed to default after pandemic-era payment pauses ended. Experts warn that inaction could lead to wage garnishment, tax refund garnishment, and long-term credit damage, though the Trump administration has temporarily delayed such measures. Borrowers are urged to open mail from loan servicers or the Department of Education and explore options like rehabilitation or consolidation, with FICO noting that payment history is the biggest factor in credit scores. Recent sweeping federal loan changes, including new borrowing caps and fewer repayment plans, have added to borrower confusion, but officials say a simplified system and a 1% interest rate reduction for direct debit aim to encourage timely repayment.