December 10th, Berkeley, CA — The nonpartisan California Policy Lab (CPL) released a new analysis today, showing that most student loans are still effectively paused and one in four requiring payment are delinquent. A proposed settlement announced by the Department of Education yesterday would require 7.7 million borrowers to restart payments after five years of pause, potentially leading to millions more borrowers in financial distress. Student loan borrowers are also repaying loans over longer periods of time, and the share of borrowers who have been repaying their loans for more than 10 years has doubled from a decade ago (from 22% to 40%).
“It probably won’t be a very merry Christmas for millions of student loan borrowers,” explains Evan White, Executive Director of the California Policy Lab’s UC Berkeley site, and a member of the research team that created and maintains the California Credit Dashboard. “If yesterday’s settlement is approved by the court, our analysis suggests that millions more borrowers will soon be behind on payments, which has cascading effects for their financial lives and their families.”
The analysis uses credit bureau data from the California Credit Dashboard, looking at trends through the third quarter of 2025.
Key findings:
- Two out of three student loans are not being actively repaid. That’s partly due to a recent surge in the use of administrative forbearance while court cases are pending.
- The share of loans in deferment or forbearance has more than doubled since mid-2023 and now stands at 49%.
- Of student loans requiring a payment, a full 25% are behind on payments.
- A proposed settlement announced yesterday will require 7.7 million borrowers to restart payments. If those borrowers are delinquent at the same rate, nearly 2 million more borrowers will be late on payments.
- The share of borrowers that have been repaying their loans for more than 10 years has doubled from a decade ago (from 22% to 40%).
California Credit Dashboard: Insights into Californians’ Financial Health
The insights from the fact sheet are from the interactive California Credit Dashboard, which includes 10 longitudinal charts for 6 types of debt (auto, credit card, home equity, mortgage, student, and other) and collections. The 10 figures can be sorted by 7 age groups, 9 economic regions, and 5 credit ratings. The Dashboard also includes 4 county-level maps which can be filtered by generation, loan type, credit score, and timeframe (2004 to present).
Using the interactive the maps, users can compare:
- Delinquency rates
- New loan amounts
- Monthly payments
More about the California Credit Dashboard
The Dashboard uses credit-bureau data from the University of California Consumer Credit Panel. All figures in the Dashboard are based on a 2% random sample of individuals. Where applicable, the results are multiplied by 50 to obtain the full-population estimate. A technical appendix provides detailed information about the data and underlying research. Several dozen faculty and graduate students from the University of California currently use this dataset for research.
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The California Policy Lab is an institute based at the University of California that generates research insights for government impact. Through hands-on partnerships with government agencies, CPL performs rigorous research across issue silos and builds the data infrastructure necessary to improve programs and policies that millions of Californians rely on every day.