Student Loan Delinquency Hits 10.9% In New York Fed Q3 2026 Report

Student loan delinquency kept climbing in the third quarter of 2026, according to the New York Fed’s Quarterly Report on Household Debt and Credit. The share of student loan balances 90 or more days past due or in default rose to 10.9%, up from 10.6% in the second quarter.

Student loans now make up about 8.7% of the $19.1 trillion in total household debt. You can see our full breakdown of student loan debt statistics.

Total student loan debt increased $5 billion in the quarter to $1.656 trillion. Over the past year, student loan balances grew just $3 billion, the smallest increase of any debt category in the report.

The Fed also reported that the rate of balances newly moving into serious delinquency fell to 7.72%, down from 14.26% in the third quarter of 2025. That continues the slowdown we reported in the New York Fed’s second-quarter student loan data. This simply means the pace of borrowers falling behind has slowed by almost half from a year ago. However, more people are still behind overall.

Why It Matters

Using the Fed’s figures, The College Investor calculates that about $180 billion in student loan balances was 90 or more days late or in default at the end of September. A year earlier, the same math put that figure near $155 billion. That’s an increase of about $25 billion in 12 months, even as new delinquencies slowed.

Each late payment also negatively impacts borrower credit reports, and more than 2.2 million newly delinquent borrowers lost over 100 credit points when reporting resumed in 2025.

Serious delinquency is the last stop before default. Federal student loans default after 270 days without a payment, and the U.S. Treasury now handles collections on defaulted federal student loans. Borrowers in default face aggressive collections when it resumes, including wage garnishments, tax offsets, and more.

You can see what this looks like and how this compares to pre-pandemic levels in the table below.

Why Is Delinquency Rising If Fewer Borrowers Are Falling Behind?

It’s confusing to see that the rate of borrowers falling behind has fallen so much while the total amount of borrowers delinquent has increased.

The 10.9% figure is a snapshot of every student loan balance that is seriously late at the end of the quarter. The 7.72% figure counts balances that newly crossed 90 days late, and the Fed calculates it as a four-quarter moving sum. Both come from the Fed’s Equifax credit panel, the same source behind earlier New York Fed data on 3.6 million new defaults.

That four-quarter tracking window explains the drop. Servicers resumed reporting missed federal student loan payments to credit bureaus in early 2025, which set off a record wave of borrowers behind on payments. That surge has now aged out of the Fed’s window, cutting the flow rate nearly in half.

Today’s 7.72% is also below the 9.21% rate the Fed reported for the fourth quarter of 2019.

The rising 10.9% rate tells the other half of the story. Balances keep entering serious delinquency faster than borrowers pay them off, catch up or get them forgiven. Federal Student Aid data points the same direction, with defaults up about 400,000 borrowers in the quarter ending June 30 to more than 9.3 million. We won’t see the next batch of federal student aid data until December.

How Does Today Compare To Before The Pandemic Pause?

The share of student loan balances 90 or more days late is back almost exactly where it stood before the Covid-19 pandemic pause.

The Fed reported 11.1% of balances were 90+ days late in the fourth quarter of 2019, the last full quarter before federal student loan payments and collections stopped in March 2020. It reported 10.8% in the first quarter of 2020, so today’s 10.9% sits between those two readings.

Balances have grown since then, from $1.51 trillion at the end of 2019 to $1.656 trillion today. The same math puts seriously delinquent student debt at about $168 billion in late 2019, compared with about $180 billion now. Delinquency has returned to its pre-pandemic level, and that level left roughly one in nine dollars of student debt seriously behind.

Which Borrowers Are Falling Behind Fastest?

Borrowers 50 and older now move into serious delinquency at a higher rate than any other age group, according to the Fed’s age breakdown. Borrowers 18 to 29 have the lowest rate. That carries extra risk for older borrowers, since the government can garnish part of Social Security benefits to collect defaulted federal student loans.

How do borrowers over 50 have so much student loan debt? Well, it’s generally a combination of paying for their children’s college through Parent Plus Loans and/or going back to graduate school later in life. You’ll notice that these are two areas that the new One Big Beautiful Build Act has put new loan limits on moving forward.

A Government Accountability Office report found that about 2.19 million of the 3.1 million Parent PLUS borrowers were 50 or older in fiscal 2015 (the last year with public age data). That’s about 70%.

Federal Student Aid counted 3.6 million Parent PLUS borrowers owing about $115 billion as of March 31, 2026, so roughly 2.5 million would be 50 or older if the 2015 age mix still holds.

What Changed For Parent PLUS Borrowers On July 1, 2026?

Parent PLUS borrowers also lost their income-driven repayment options on July 1, 2026. Only parents whose Direct Consolidation Loan was disbursed by June 30, 2026 can still use Income-Contingent Repayment, then move to Income-Based Repayment before ICR ends on July 1, 2028. Parent PLUS loans can never use the new Repayment Assistance Plan at all.

Parents who missed the deadline are left with fixed payments. Un-consolidated Parent PLUS loans keep the Standard, Graduated and Extended plans, while a consolidation completed after July 1, 2026 is limited to the Tiered-Standard plan. These parents also lose the pathway to Public Service Loan Forgiveness since they don’t have access to an eligible repayment plan. Taking out any new Parent PLUS loan after July 1 shuts off income-driven repayment for all of a parent’s Parent PLUS debt, even for parents who consolidated in time. We’re seeing this happen now to parents who are still borrowing for children in college.

Could More Parent PLUS Borrowers Qualify For Bankruptcy Discharge?

The College Investor believes Parent PLUS borrowers who missed the deadline may now have a better shot at discharging their student loans in bankruptcy than ever before. Bankruptcy still requires proof of undue hardship through a separate lawsuit called an adversary proceeding, and a judge makes the final decision. However, now with the lack of income-driven repayment options, the ability to prove undue hardship has likely increased.

The Justice Department’s 2022 guidance for government attorneys (PDF File) sets out when the government will agree that a borrower meets that bar. Anyone weighing this route should talk with a bankruptcy attorney first.

That guidance measures ability to pay against the Standard plan payment, not an income-driven payment. It also says that not enrolling in an income-driven repayment plan doesn’t, by itself, show a lack of good faith. A Parent PLUS borrower locked out of income-driven repayment has no lower, income-based payment the government can point to as proof the debt is affordable.

The guidance also presumes hardship will last when the borrower is 65 or older or the student loans have been in repayment for at least 10 years.

Why Did Student Loan Balances Barely Grow?

Fall disbursements usually lift third-quarter balances significantly, but this year’s $5 billion increase was one-third of the $15 billion rise in the third quarter of 2025. The Fed doesn’t say why.

This was the first fall under the new federal borrowing caps, including the end of Grad PLUS loans for new graduate students.

How This Connects

The Fed’s $180 billion figure and FSA’s count of about $234 billion in defaulted federal student loans are separate measurements.

The Fed samples Equifax credit reports covering federal and private student loans, and it excludes accounts a lender hasn’t reported within three months. FSA counts defaults directly from the federal portfolio, the more direct source that shows a $180 billion default figure for December 2025.

For borrowers with their own federal student loans who are behind but not yet in default, an income-driven repayment plan is the way to avoid default. The Repayment Assistance Plan sets payments as low as $10 a month, and our RAP calculator shows what a payment would be. A borrower with $45,000 in adjusted gross income and no dependents would pay about $150 a month under RAP, or 4% of their income. Collections, on the other hand, will take 15% of their income along with any tax refunds, a significantly higher amount than their RAP payment.

Borrowers already in default can get out through rehabilitation or consolidation. Rehabilitation takes nine on-time payments and removes the default from a credit report. Consolidation is faster, but the default record stays.

It’s important to remember that wage garnishment costs more than any repayment plan for nearly every borrower, so defaulting is never a smart path.

What’s Next

FSA’s next quarterly portfolio update, with data through September 30, will show whether defaults kept rising through the summer. The Education Department and Treasury have said they plan to restart wage garnishment on defaulted federal student loans after pausing it earlier in 2026.

The New York Fed’s fourth-quarter report, due in early 2027, will show whether the 10.9% delinquency rate keeps climbing.

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