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Alexis Madrigal: Welcome to Forum. I’m Alexis Madrigal. Student loans are one of the key ways Americans access higher education — and for decades, this was a bipartisan space. A more educated workforce meant a more productive workforce. But things have gotten weird in student loans. If you haven’t been paying close attention, this hour may shock you. Programs are changing, borrowers are becoming delinquent, and there are more troubles ahead.
To begin navigating us into these choppy waters, we’re joined first by Evan White, executive director of the California Policy Lab at UC Berkeley. Welcome.
Evan White: Thank you for having me on.
Alexis Madrigal: So at the lab, you’ve been researching student loan delinquency rates in California. Put those numbers in context for me. We said at the top: 11% of loans are delinquent. How does that compare to credit card loans or something like that?
Evan White: Yeah. Well, if you’ll allow me, I’ll hearken back to the beginning of the pandemic for a moment. The economy shut down — we had the largest unemployment spike in recorded history. Bigger than the Great Recession, bigger than the Great Depression. And the federal government undertook a program of revamping the social safety net that was, in my opinion, unprecedented — certainly in recent years. We saw stimulus payments, expanded unemployment insurance, expanded food benefits, the child tax credit which on its own reduced child poverty by half, PPP small business loans, mortgage forbearance, eviction moratoria. All of these were income supports. And on top of this, there was the student loan payment pause.
The sum impact was to reduce financial distress dramatically.
Alexis Madrigal: Pay down their credit cards, get on time with various things.
Evan White: We had the lowest levels of financial distress we’ve recorded. In mid-2021, we were seeing delinquencies as low as they’ve ever been and savings rates higher than they’d been in a long time. As I mentioned, child poverty was down significantly. Then all of those programs — except for a couple, including the student loan payment pause — were withdrawn. And what we saw was that financial health got worse and worse. Over the course of two years — from mid-2021 to 2023–2024 — financial health was as bad as before the pandemic, and then it kept getting worse. Savings rates went down, delinquencies went up. And at the end of 2023, the student loan payment pause ends.
It was very bad timing for a lot of Americans who were already struggling to make their payments. And it was confusing — they were getting mixed signals about when it would end, it kept getting extended. There was about a year when late payments weren’t counted against borrowers, but we just started seeing late payments show up in 2025 — and they skyrocketed. If you look at the chart, it’s like a skyscraper coming out of the ground. They went up to 11% on average in California. That’s higher than anything we’ve seen since 2004. It’s three times higher than the credit card delinquency rate. And our expectation is that it’s going to continue to get higher. Other sources suggest maybe one in three student loan borrowers may be late on their payments.
Alexis Madrigal: Like 30% delinquency rates? Is that what you’re imagining?
Evan White: Potentially. Before the pandemic there were a lot of student loan borrowers in default — close to one in three. All those folks got sort of a reset during the payment pause. The derogatory mark was taken off their credit report. They got a chance to start over.
Alexis Madrigal: So is this actually a return to “normal”? Maybe this isn’t as out of the norm as it sounds?
Evan White: Oh no — I think it’s very much out of the norm. I think we’re going to see things get worse. And adding to this was a great deal of confusion about what was happening during the payment pause.
Alexis Madrigal: It kind of seems like people are beginning to consider it optional to pay these things — like what we saw with school attendance, where there was a structural shift during the pandemic.
Evan White: Maybe. They were told their student loans were going to be forgiven — or forgiven in part. And if they didn’t follow the court cases, they might not have known that those initial promises didn’t come through. So yes, maybe some folks see it as optional — but I think there’s a much larger share who just don’t know what they should be doing. They’ve had to be strategic about whether they pay their loans because they’re thinking: “Some of this might be forgiven, so maybe I should hold off.” There are borrowers in repayment plans that are grandfathered in but will soon expire under the new HR1 plan. It’s a confusing space for folks — and they’re wondering what to do.
Alexis Madrigal: We’re talking about student debt and the federal loan system with Evan White at the California Policy Lab at UC Berkeley. We want to invite you into this conversation too. Do you have student loans? Tell us what you’ve been experiencing. We’re particularly interested if you’ve been building toward public service loan forgiveness. What are your concerns right now? You can call us at 866-733-6786. That’s 866-733-6786. Email is forum@kqed.org. You can find us on Bluesky, Instagram, etc., at @KQEDForum.
We’ve also got a couple of other guests now. Julie Margetta Morgan, president of the Century Foundation — she previously served in the Biden administration at the Consumer Financial Protection Bureau. Welcome, Julie.
Julie Margetta Morgan: Thank you. Thanks for having me.
Alexis Madrigal: Welcome back, actually. And we are also joined by Mike Pierce, executive director and cofounder of Protect Borrowers. Welcome.
Mike Pierce: Thanks for having me.
Alexis Madrigal: Julie — let’s talk about some of the changes we saw during COVID that Evan was talking about. What do you make of that confusion? Could it have gone a different way? Why was this so confusing, and how do we clean it up now?
Julie Margetta Morgan: You know, I think it could have gone a different way. There were pushes and pulls for borrowers where they were told the payment pause is ending, then it was extended, then extended again. It really didn’t give people the sense of certainty we might have wanted for them to start repayment. But it was always going to be hard for borrowers dealing with the effects of COVID — and the disappearance of relief — to go back into repayment. To their credit, the Biden administration did do a number of things meant to ease the burden, including offering an extremely generous income-driven repayment plan, and some flexibilities around credit reporting and the impacts of missed or late payments. But this collided with larger economic forces increasing the burden across their balance sheet — tariffs on groceries, increased health care costs. Our research at the Century Foundation shows people are extremely worried about their budgets across the board — one in four are even skipping meals. So the trouble paying student loans exists in that larger context — people are having to pick and choose what they pay because their bills are insurmountable.
Alexis Madrigal: Mike Pierce — before the pandemic, was the federal student loan system strong? Or were there already well-known problems?
Mike Pierce: The student loan system has been broken for decades. In part, that’s because of the government’s reliance on private companies to send people bills, set their payment terms, and answer questions. Companies like Navient back then — or Mohela today — have been breaking the law and treating people out of their rights basically as long as the federal government has had a role in the system.
Alexis Madrigal: Why did they come to rely on these services?
Mike Pierce: Under President Obama — and full disclosure, I worked at the Consumer Financial Protection Bureau in the Obama administration and worked on the government’s prosecution of Navient — there was a deal in Congress to socialize some aspects of student lending. The government would make loans. But in that same bill there was a deal to privatize servicing and collection. Keeping these private companies at the table even though the government was going to become the lender. And families have been paying a heavy price every year for almost twenty years.
Alexis Madrigal: And I assume the Biden-era changes were unable to affect that underlying structure?
Mike Pierce: They delivered justice for millions of people treated badly by loan servicers. Programs called the Public Service Loan Forgiveness Waiver and the IDR Account Adjustment — very clunky names — but they canceled debt for more than five million people, many or most of whom had been wronged by those abuses. But they didn’t fix the root cause — which is that we rely on these private companies and they are just not doing their job.
Alexis Madrigal: We’re talking about the student debt federal loan system with Mike Pierce of Protect Borrowers. As you heard, he also worked at the Consumer Financial Protection Bureau under President Obama. Also with us: Julie Margetta Morgan of the Century Foundation, who worked at the CFPB under President Biden. And Evan White at the California Policy Lab at UC Berkeley — who knows, maybe he’ll work at the CFPB too!
And of course — we want to hear from you. Do you have a student loan? Tell us what you’ve been experiencing over these years.
