For many American student loan borrowers, the risk of default feels closer by the day. More than 5 million borrowers with student loans from the Department of Education were in default as of June 2025, according to Federal Student Aid data. And more than 4 million more are in late-stage delinquency and at risk of defaulting in the coming months. Defaulting on your student loan can carry a major cost, from mounting interest charges to garnished wages and withheld tax refunds. While your loans are in def ...