Over 25% of approximately 400,000 federal student loan borrowers across the country saw their repayment progress suspended during the third quarter of 2025 due to various leniencies and postponements.
Mark Kantrowitz, an analyst specializing in higher education, reported to NBC News that in this quarter, around 10.3 million borrowers were more receptive to deferments, a noticeable increase from just 2.9 million the previous year. Additionally, 3.4 million borrowers postponed their loan payments, up slightly from 3.2 million in the same period last year.
To be honest, time spent in forbearance or deferment can have its costs. The average borrower has about $39,000 in debt at an interest rate of 6.7%. This means they’re accumulating roughly $219 a month in interest expenses alone, according to Kantrowitz.
The federal government’s fiscal year starts on October 1, and the third quarter runs from April 1 to June 30.
Interestingly, the number of borrowers experiencing economic hardships has doubled, increasing from 50,000 in the third quarter of 2024 to 100,000 in 2025. Kantrowitz also noted that unemployment-related postponements have risen from 140,000 to 180,000.
The surge in pauses amid policy changes
Consumer advocates highlight that many borrowers struggle to meet the repayment options currently available to them. This difficulty partly stems from measures enacted during the Trump administration, which impacted former President Biden’s education repayment strategies introduced this summer.
Some borrowers under these initiatives are paying as little as $0 on their student loans.
While forbearance continues to be available, the current administration is urging those in repayment to reassess their options, particularly highlighting the need to consider alternative approaches.
Although some borrowers might opt to pause their payments, others find it challenging to escape their financial struggles, as Kantrowitz pointed out.
Last year, the plan attracted over four million borrowers before the more lenient stance became available, which surprised many.
By July, the education sector faced a backlog of more than 1.3 million applications from borrowers seeking income-driven repayment options.
Concerns about student loan default risks
At large, nearly 43 million borrowers owe upwards of $1.6 trillion in student loans, as noted by the Education Department earlier this year.
Defaults are expected to rise. According to TransUnion, about 3 million borrowers may default by August, posing risks of wage garnishments of up to 15%, with an additional two million on track to follow suit this month.
The situation has changed since the pandemic-era suspension, which once shielded borrowers from credit score declines. Now, many are facing lower credit ratings due to missed payments.
Borrowers who are behind can explore repayment strategies and options using available government loan simulator tools.
