Core Insights - Millions of Americans may soon be reported as in default on their student loans, with estimates suggesting nearly 10 million borrowers could be affected, representing about 25% of the federal student loan portfolio, which would set a record [2] Group 1: Current Default Situation - Over four million Americans are currently in default or at least 270 days overdue on their student loans, but have not yet been reported to credit bureaus due to processing delays [2] - The Department of Education indicates that the number of borrowers in default could reach almost 10 million when reported, marking a significant increase in defaults [2] Group 2: Impact on Borrowers - Borrowers who do not act quickly to address their overdue payments risk significant drops in their credit scores and potential garnishment of wages, Social Security benefits, and tax refunds [3] - Americans reported as 90+ days late on their loans have experienced an average credit score drop of 60 points [7] Group 3: Trends in Delinquency - The transition rate into serious delinquency has increased to 14.3% from July to September, up from 12.9% in the previous quarter, indicating a rapid movement of borrowers into more severe delinquency [6] - Serious delinquencies reached a record high of 30.6% in March, although it has since decreased to 28.5%, remaining above pre-pandemic levels [5]