Danielle Arnone, a Utah mother of two, never imagined her student loans would drag her family’s finances into crisis.
But after struggling to keep up with soaring living costs—groceries, preschool, gas—she and her husband fell behind on payments.
The result? A 150-point drop in her credit score, leaving her feeling helpless.
“It was shocking—made us sick to our stomachs,” Arnone told KUTV 2 News. “It’s just a gray cloud that’s always there.”
She’s not alone. 5 million borrowers have already defaulted on federal student loans, according to the U.S. Department of Education.
Worse, another 4 million are severely delinquent—meaning nearly 10 million Americans could soon be in default.
Why Is This Happening?
- Post-Payment Pause Fallout: After a three-year break, loan repayments resumed in 2023, but many borrowers—already stretched thin—couldn’t keep up.
- No More Relief: Despite efforts, widespread loan forgiveness was blocked, leaving struggling borrowers with few options.
- Harsh Consequences: Defaults can lead to wage garnishment, seized tax refunds, and even reduced Social Security benefits.
What Can Borrowers Do?
- Check Your Status: Visit StudentAid.gov to confirm if you’re in default.
- Explore Repayment Plans: Income-driven options or loan consolidation may help.
- Avoid Risky Fixes: Refinancing with private lenders or using credit cards can make things worse.
- Seek Help: Nonprofit credit counselors can guide you toward a realistic plan.
For millions like Arnone, the road ahead is daunting. “It’s going to be overwhelming, but we’ll figure it out,” she says. “We have to.”
— Adapted from reporting by Rebecca Holland