The student loan crisis isn’t just back—it’s worse than ever. After a nearly five-year reprieve due to pandemic-era protections, the Biden administration’s ill-conceived policies finally hit reality this year, with devastating consequences for millions of hardworking Americans.
According to a recent report by the Federal Reserve Bank of New York, student loan delinquencies have skyrocketed since the government resumed reporting overdue payments to credit bureaus. In just one quarter, the share of student debt that is 90 or more days past due ballooned from a mere 0.8 percent to a staggering 8 percent. Folks, that’s a tenfold increase—an unprecedented spike in delinquency rates that should alarm anyone concerned about the financial health of our nation.
This rapid deterioration follows the expiration of the 43-month pause initiated in March 2020, which was extended through a so-called “on-ramp” period in 2023–2024. During that time, missed payments incurred no penalties, creating an artificial sense of security for borrowers who were misled into believing debts could be indefinitely suspended or even canceled outright by executive fiat.
The consequences of these reckless policies are now painfully evident. As the New York Fed’s Daniel Mangrum pointed out, “Transition rates into serious delinquency have leveled off for credit card and auto loans over the past year. However, the first batch of past due student loans was reported in the first quarter of 2025, resulting in a large jump in seriously delinquent borrowers.”
Let’s be crystal clear: This crisis was entirely preventable. It was fueled by Former President Biden’s cynical attempt to buy votes with promises of mass loan forgiveness—a scheme rightly struck down by the Supreme Court in 2023 for exceeding executive authority. Rather than promoting fiscal responsibility, Biden and his Democrat allies fostered dependence and unrealistic expectations, leaving millions of borrowers ill-prepared for the inevitable day of reckoning.
The implications are grim. Already, roughly six million borrowers—over 10 percent of all student loan balances—are either past due or in default. The economists at the New York Fed have warned, “Millions of borrowers face steep declines in their credit standing, which will increase borrowing costs or seriously limit their access to credit, like mortgages and auto loans.” And we know that damaged credit ratings don’t just affect individuals—they ripple across families, communities, and the entire economy.
Adding insult to injury, the Education Department announced this month that involuntary debt collection measures will resume—seizing tax refunds and federal benefits from nearly 200,000 borrowers next month alone, with wage garnishment notices soon to follow for over five million additional defaulters. Secretary Linda McMahon promised a return to “common sense and fairness,” affirming the Trump administration’s commitment to restoring accountability and discipline to federal loan programs.
Make no mistake: Biden-era policies have created this chaos. But thankfully, under President Trump’s renewed leadership, the administration is committed to reversing this damage and putting America First by helping borrowers return to repayment schedules, restoring financial discipline, and protecting taxpayers from further burdensome bailouts.
It’s not too late to fix this mess, but we need to recognize the root of the problem: federal meddling in higher education and an irresponsible culture of entitlement fostered by the left. Universities have inflated costs without accountability, while Democrats have dangled promises of debt cancellation to secure votes. The result? An entire generation saddled with debt, credit ruined, and financial futures jeopardized.
The solution requires a return to conservative principles: accountability, responsibility, and personal financial prudence. We must reform the federal student loan system, demand transparency and cost-control from higher education institutions, and educate young Americans about responsible borrowing.
The Biden administration’s reckless experiment with student loans has failed spectacularly. The time for accountability is now—and President Trump is leading the charge to restore fairness, discipline, and fiscal sanity for millions of Americans.
