Story perspectives

9.5 Million Student Loans Default as Freeze Ends, Garnishments Loom

7/20/2026

Summary

Story summary

Over 4.2 million borrowers defaulted on loans between April 2025 and March 2026, raising defaults to 9.5 million.
Former Texas teacher Ashley Dreahn, who believed her loans were discharged in bankruptcy, saw the balance rise to $94,298 and default.
Default can damage credit scores and trigger collections.
Education Department ended the pandemic freeze in fall 2024 and replaced the SAVE plan with a schedule.
Moody’s warns garnishments could begin within a year.

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Story summary

Over 4.2 million borrowers defaulted on loans between April 2025 and March 2026, raising defaults to 9.5 million.
Former Texas teacher Ashley Dreahn, who believed her loans were discharged in bankruptcy, saw the balance rise to $94,298 and default.
Default can damage credit scores and trigger collections.
Education Department ended the pandemic freeze in fall 2024 and replaced the SAVE plan with a schedule.
Moody’s warns garnishments could begin within a year.