Student Loan Defaults Threaten Over 1,100 Colleges as Pandemic-Era Pauses End

The resumption of federal student loan collections on May 5, 2025, marks the end of pandemic-era relief measures, exposing a brewing crisis in higher education. Federal data reveals that more than 1,100 institutions risk losing access to financial aid programs due to soaring Cohort Default Rates. With a quarter of the federal loan portfolio either in default or severe delinquency, the fallout will Ripple across borrowers and schools alike.

Colleges dependent on tuition revenue face existential threats—defaults erode institutional credibility, deter enrollment, and destabilize budgets. Borrowers confront credit score devastation, wage garnishment, and barriers to future education. The systemic strain underscores an urgent need for policy interventions to mitigate cascading damage to both academic institutions and economic mobility.