Map Shows States Where Student Loan Delinquencies Are Highest
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
Several states in the South have the highest rates of student loan delinquency, according to a map from researchers at the Federal Reserve Bank of New York.
Why It Matters
Roughly 5.3 million borrowers are in default on their federal student loans, while another 4 million are late in making payments.
Federal student loans had not been referred for collection since March 2020, including those that were in default, because of the COVID-19 pandemic. But the Department of Education announced it would begin collection on student loans that are in default this month, including the garnishing of wages for potentially millions of borrowers.
What To Know
The delinquency rate for student loan balances spiked after a near five-year pause on reporting delinquent federal student loans ended, according to a report from the New York Fed.
Some 7.7 percent of aggregate student debt was 90 or more days delinquent in the first quarter of 2025, up from less than 1 percent in the previous quarter, the report said.
In a blog post, researchers estimated that 13.7 percent of borrowers—about six million Americans—had a loan that was nine or more days past due or in default in the first three months in 2025, a similar share to the same period in 2020.
Researchers also calculated the borrower delinquency rate in each state after removing those who were not in repayment or had a zero dollar monthly payment.
They wrote that seven states have a conditional borrower delinquency rate above 30 percent, that is, the percentage of borrowers with at least one student loan that is 90 or more days past due or in default.
Those states are Mississippi (44.6 percent), Alabama (34.1 percent), West Virginia (34.0 percent), Kentucky (33.6 percent), Oklahoma (33.6 percent), Arkansas (33.5 percent), and Louisiana (31.8 percent).
The states where the rate is below 15 percent are: Illinois (13.7 percent), Massachusetts (14 percent), Connecticut (14.5 percent), Vermont (14.7 percent), and New Hampshire (14.8 percent).
What People Are Saying
Daniel Mangrum, Research Economist at the New York Fed, said in a statement: "Transition rates into serious delinquency have leveled off for credit card and auto loans over the past year. However, the first batch of past due student loans were reported in the first quarter of 2025, resulting in a large jump in seriously delinquent borrowers."
They wrote: "Millions of borrowers face steep declines in their credit standing which will increase borrowing costs or seriously limit their access to credit like mortgages and auto loans. It is unclear whether these penalties will spill over into payment difficulties in other credit products."
Secretary of Education Linda McMahon said in a statement last week: "As we begin to help defaulted borrowers back into repayment, we must also fix a broken higher education finance system that has put upward pressure on tuition rates without ensuring that colleges and universities are delivering a high-value degree to students.
"For too long, insufficient transparency and accountability structures have allowed U.S. universities to saddle students with enormous debt loads without paying enough attention to whether their own graduates are truly prepared to succeed in the labor market."
What's Next
This month, the Department of Education began involuntary collection through the Treasury Department's offset program, which withholds government payments—including tax refunds, federal salaries and other benefits—from people with past-due debts to the government.
Later this summer, the department will also begin garnishing wages for borrowers in default.
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