'Sick to our stomachs': 5 million borrowers have now defaulted on their student loans — and the government says that number could soon double. Why that can have catastrophic consequences

The state of federal student loans and borrowers

The U.S. Department of Education (ED) released some dismal data in April. More than 5 million student loan borrowers had not made a payment in over a year and were in default. A further 4 million borrowers were in late-stage delinquency — meaning that within a few months, nearly 10 million borrowers could find themselves defaulting on their loans.

The ED also noted that 42.7 million borrowers owed more than $1.6 trillion, and only 38% of them were up to date on their student loan payments.

During his term, President Joe Biden sought student loan forgiveness for millions of borrowers, however, many of his initiatives were rejected by the courts. This left many borrowers — who were already struggling with the cost of living — confused and unsure what to do about their payments once the pause was lifted.

“I think some saw the pause as a bit of extra cash, but others saw it as a lifeline — they didn’t know how they were going to make the payments to begin with,” Tara Alderete of Money Management International told KUTV 2 News.

One thing appears certain — student loan borrowers shouldn’t expect any charity under President Donald Trump.

“There will not be any mass loan forgiveness,” the ED said in its April news release.

Borrowers may be subject to collection activities only after receiving “sufficient notice” and opportunity to repay their loans, according to the ED.

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How to deal with defaulted student loans

Borrowers who are in default may want to start making payments right away to limit any financial impacts. If you’re not sure whether you are in default on your loans, you can check StudentAid.gov for more information on your loan status.

Those who aren’t able to budget for their student loans can explore repayment or consolidation options through the U.S. Department of Education.

Beware of refinancing loans through private lenders or using credit cards, which can come with high interest rates and push you further into debt.

If you’re unsure how to move forward with reducing your debt, don’t be afraid to seek help from a nonprofit agency. Expert advice can help you feel more in control of your budget and your finances.

There are options and help available, even if you’ve been avoiding your student loan payments for years.

“It’s going to be overwhelming, but we’ll figure it out. We have to,” said Arnone.