More than seven million borrowers were in default as of June on federal or private student loans, meaning they are more than 90 days late on a payment, according to data from the Department of Education and the National Studen Loan Data System.
Of the nearly $1 trillion owed for federal student loans, $146 billion is outstanding because the borrowers are still in school and just more than $90 billion is not being paid because the borrowers are in forbearance - meaning their payments have been temporarily suspended, but interest continues to accrue.
Unlike other consumer credit, borrowers in default on a federal student loan might see their tax refund taken and their wages garnished without a court order, according to a report by Rohit Chopra, the student loan ombudsman for the Consumer Financial Protection Bureau.
Another $90 billion is outstanding because borrowers have defaulted. But the average amount for defaulted borrowers is approximately $14,500 below the average of $27,000 that students typically build up during college.
While millions of borrowers are still struggling to make payments on their student loans, just slightly more than 10% of federal loan borrowers are enrolled in some sort of income-based repayment plan.
Meanwhile, an estimated 10 million borrowers are enrolled in the standard 10-year repayment plan, and 3.35 million are enrolled in extended or graduated repayment plans that drag out payments over a longer period of time, or gradually increase payments over time.
Under the federal "Pay As You Earn" plan, monthly payments can never exceed 10% of a borrower's income, and any debt left after 20 years is forgiven. Less than 50,000 borrowers are enrolled in that plan.