Underwater on Student Debt: Understanding Consumer Credit and Student Loan Default

A quarter million federal direct student loan borrowers see their loans go into default for the first time every quarter, and an additional 20,000 to 30,000 borrowers default on their rehabilitated loans. Using nationally representative data from one of the nation’s three credit bureaus and following student borrowers who entered repayment in 2012, this report sheds new light on who defaults. Of the cohort examined, more than 20 percent defaulted at least once within four years.