As a young person just starting out after college, the last thing you need is a major financial setback. For millions of students, life after college just got exponentially harder because the COVID-era student loan payment freeze is up, and they have defaulted on their payments.
According to The Washington Post, “Credit scores dipped by more than 100 points for 2.2 million delinquent student loan borrowers, and 150 points or more for more than 1 million in the first three months of 2025.” That means these borrowers will find it difficult to buy a car, obtain a mortgage, or qualify for a credit card. One usually sees this sort of drastic credit hit only after declaring bankruptcy.
Why are there so many defaults on student loans?
Well, you can blame both Presidents Donald Trump and Joe Biden for that. Trump paused student loan payments at the beginning of the COVID pandemic. Biden kept extending that pause long after life returned to normal, and even when payments resumed in 2023, there was no enforcement and no penalty for unpaid loans, thanks to Biden’s promises to “forgive” them. During his entire presidency, Biden promised that he would wipe out millions upon millions of student loan portfolios by making taxpayers foot the bill — something he never had the power to do, which even then-House Speaker Nancy Pelosi, a Democrat, admitted. The Supreme Court even declared his unilateral student loan forgiveness unconstitutional — and he came up with a workaround.
This perceived failure of President Biden — a failure that all taxpayers should really be rejoicing in — probably hurt the Democrats in last November’s elections, particularly vis-à-vis young voters. There is also something sad to be said about how leftist youngsters are so programmed to expect a free lunch that handouts have become the only thing the Democrat Party has to offer.
In February, creditors started demanding their dues. “Although 2.7 million borrowers were reported newly delinquent in February,” according to the Post, “twice as many — 5.4 million — had not been marked delinquent even though they haven’t made any student loan payments since October.”
It should have been pretty clear to these borrowers that this was the inevitable outcome.
It’s also something the federal government should have taken into account before freezing student loan payments. As economist Stephen Moore observes, “Student loan debt soared to more than $1.5 trillion during the Biden presidency, and the response by Washington was to ‘forgive’ hundreds of billions of these unpaid loans by deadbeat borrowers and let the taxpayers pick up the tab. … Those of us who watched these events unfold predicted that one result of this policy would be that many college graduates would stop paying back their loans. And guess what?”
Guess what, indeed.
The huge price tag of higher education has made loans necessary. This is largely because of the federal government interfering with and subsidizing colleges and universities, thus driving up costs. Meanwhile, students who stopped paying their massive loans in the hope that President Biden would shift the burden to taxpayers didn’t factor in the flip side. When you add in Bidenflation and high interest rates, adding in yet another monthly payment is really hard to swallow. However, defaulting on a student loan is adding insult to injury.
This fiasco should be laid squarely at the feet of bureaucrats, politicians, and statists.
