US student loan payment pauses double since 2024: Here's why millions are struggling to repay

The number of US federal student loan borrowers pausing their payments has more than doubled since 2024, with over a quarter of all borrowers currently enrolled in payment suspension programs. According to data from the US Department of Education analysed by higher education expert Mark Kantrowitz, around 10.3 million borrowers were in a forbearance status during the third quarter of 2025, up from 2.9 million in the same period the previous year. Additionally, 3.4 million borrowers deferred payments, marking a slight increase from 3.2 million in 2024.This surge in payment pauses reflects widespread financial difficulties among borrowers. The combined total of more than 13 million individuals suspending repayment highlights growing challenges in balancing student loan bills with other essential living costs such as housing and childcare.Forbearance and deferment numbers reveal repayment strugglesForbearance and deferment allow borrowers to temporarily postpone loan payments. While deferments may be granted due to specific hardships, including job loss or serious illness, forbearance is a broader category often used when borrowers cannot meet their repayment obligations.Kantrowitz's analysis shows that more than one in four of the over 40 million federal student loan borrowers are currently benefiting from these pauses. The data, covering the US Department of Education's fiscal third quarter from April to June, also indicates that economic hardship deferments doubled from 50,000 to 100,000 borrowers over the same period. Similarly, unemployment deferments increased from 140,000 to 180,000.Douglas Boneparth, a certified financial planner and president of Bone Fide Wealth in New York, noted to CNBC that the figures "show that many borrowers are struggling to balance loan payments alongside housing, child care and other rising costs."Impact of the SAVE plan repeal and backlog of applicationsThe sharp rise in forbearance is partly linked to the end of the Biden administration's SAVE plan (Saving on a Valuable Education). The plan was challenged in court by Republican-led groups and was repealed this summer under the administration of President Donald Trump.Borrowers who were enrolled in the SAVE plan were placed into forbearance during the legal dispute starting in mid-2024. This forbearance remains available, but interest is now being charged on loans paused under this scheme. Approximately 7 million people had signed up for the SAVE plan, according to the Education Department.Kantrowitz further reported that many borrowers seeking to leave the SAVE forbearance to enter income-driven repayment (IDR) plans are facing significant delays. The Education Department reportedly had a backlog of over 1.3 million pending applications for IDR plans by the end of July.Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York, told CNBC that "the student borrowers for whom the SAVE plan was the only affordable option will be severely impacted by these changes."How repayment options compare for borrowersThe repeal of the SAVE plan has narrowed affordable repayment choices. Monthly payments under SAVE were notably lower than those in other income-driven plans, making it more manageable for borrowers with limited income.The table below shows estimated monthly payments for borrowers on the SAVE plan compared with the Income-Based Repayment (IBR) plan across different income brackets, based on Kantrowitz's calculations:This illustrates that borrowers earning around $75,000 would pay $429 a month under IBR, compared with $166 under SAVE.Long-term costs of payment pauses and financial implicationsWhile pausing payments offers temporary relief, interest continues to accrue on most loans during forbearance and deferment. Kantrowitz estimates that a typical federal student loan borrower could see interest charges of around $219 per month added to their balance, assuming an average loan balance of $39,000 and an interest rate of approximately 6.7%.Boneparth, quoted by CNBC, explained that "the risk is that interest can continue to accrue during these pauses, making balances even harder to manage long-term." He also warned that this cycle of pausing repayments can delay key financial milestones for borrowers, including saving for retirement, buying a home, or starting a family.The recent increase in borrowers suspending payments and the backlog in repayment plan applications underscore ongoing challenges faced by US federal student loan holders amid changing policies and economic pressures.