Student-loan borrowers brace for repayment pressure as elections near

More than 10 million student-loan borrowers are behind on their payments.

Some borrowers say they are hoping the elections will spur new policy protections for people in default. States with tight Senate contests, including Texas and Ohio, also have high nonpayment rates, according to an Urban Institute analysis.

Sarah Bundy has been drifting in and out of student-loan default for nearly 30 years.

She took out loans for college in the mid-1990s but left school when her balance became too hard to manage. The debt was $39,000 at the time; it is now $60,000.

The 55-year-old is hoping for a Democratic surge that could lead to legislation shielding borrowers who are at risk of default.

“At my age, I can never get ahead of this,” Bundy said. “So I’m just trying to scooch under the wire as long as I can.”

About one in six adult Americans has federal student-loan debt, according to Federal Student Aid. An Urban Institute analysis found that about 16% of federal and private borrowers were 60 or more days late on payments in 2026.

Student-loan bills are adding to pressure from groceries and housing in an election increasingly focused on the cost of daily life. Higher utility bills and gas prices are also straining households, especially as inflation is rising faster than wages.

Economic worries are also influencing the debate over AI, with politicians rethinking support for data centers amid public backlash.

For borrowers, the strain is especially severe, and high delinquency rates line up with some of the nation’s most competitive races.

Texas and Ohio, both home to closely contested Senate races, recorded above-average nonpayment rates. In the House, nine battleground districts identified by the Cook Political Report as of Friday afternoon had worse delinquency rates than the national average. In Texas’s 34th District, about 28% of borrowers are delinquent, and in North Carolina’s 1st District, the figure is 25%.

Federal student-loan defaults, which usually happen after 270 days without payment, are at a record level. Forced collections on defaulted loans, including wage and federal benefit garnishment, have been paused for more than a year, and Democratic lawmakers are pushing to protect borrowers before those consequences return. Even a strong showing for Democrats would likely leave them short of the numbers needed to overcome a presidential veto.

As of June 30, 9.3 million borrowers were in default, with another 1.5 million in late-stage delinquency, according to Federal Student Aid. About 14% of the nation’s $1.7 trillion student-debt burden is in default, equal to $234 billion.

Republican lawmakers have backed President Donald Trump’s student-loan changes, saying they will help borrowers repay what they owe. Sen. Roger Marshall, who is seeking reelection in Kansas, has previously said Trump’s “big beautiful” spending legislation “made transformational reforms to student loans.”

Borrowers who spoke to Business Insider said they worry about the consequences of default, especially wage garnishment and losses from Social Security checks and tax refunds. Those fears have grown with the prospect of higher monthly bills under Trump’s repayment overhaul.

“All we can do is keep pushing for every little bit of progress we can get on this,” Bundy said.

A rising wave of student-loan defaults

Luke Helton, a student-loan borrower in Tennessee, previously told Business Insider that the only way he can cover an expected $600 payment increase is by drawing from his retirement savings.

He voted for Trump because he believed the campaign promise to put America first, but his loan troubles have made him question that decision.

“They talked a big game about caring about the little people, and they just haven’t,” Helton said.

The defaulted student-loan portfolio is also changing. The Education Department is moving ahead with its plan to transfer defaulted student-loan accounts to the Treasury Department. The shift will happen in phases, and the latest step was the launch of a new online portal meant to help borrowers regain good standing and access default resources.

Education Secretary Linda McMahon said the department “was never intended to serve as the fifth largest bank in America, and that’s exactly why we partnered with the Treasury Department to improve the administration of federal student aid programs that millions of American students, families, and borrowers rely on.”

Democratic lawmakers have questioned whether Treasury can manage federal student loans effectively. More than 60 of them urged a halt to the transfer and an extension of the pause on involuntary collections so borrowers could keep getting relief as they adjust to Trump’s repayment overhaul. Sen. Bernie Sanders also led colleagues in introducing a bill to prevent older borrowers and borrowers with disabilities from facing Social Security garnishment if they default.

Bundy recently traveled to Washington, DC, to press New York lawmakers to support Sanders’ bill. She is among millions of borrowers moving off the Biden-era SAVE plan, which provided lower monthly payments. She said she is unsure how she will afford payments when they resume and worries that she, along with millions of others, could fall behind.

“When these garnishments start back up, it’s really going to throw us pretty far back down,” Bundy said. “I don’t think people realize just how brutal it really is out there.”