Market commentator The Kobeissi Letter warned that the U.S. student loan crisis is intensifying as delinquent federal student debt climbed to a record high in the first quarter of 2026, signaling mounting repayment stress across American households.
Student Loan Delinquencies Hit Record High
In a post on X on Sunday, The Kobeissi Letter cited Bloomberg Economics calculations based on New York Fed Consumer Credit Panel and Equifax data showing delinquent federal student loan debt jumped by $12.2 billion in the first quarter of 2026 to $171.4 billion, an all-time high.
The commentary also noted that the proportion of seriously delinquent loans rose by 0.7 percentage points to 10.3%, the highest level since the first quarter of 2020. Around 2.6 million borrowers entered default during the first quarter, following roughly 1 million defaults in the fourth quarter of 2025.
“The US student loan crisis is intensifying,” The Kobeissi Letter wrote, sharing data from the New York Fed Consumer Credit Panel and Equifax.
The Kobeissi Letter added that the average borrower entering default is now nearly 40 years old, up from 36.4 years old before the pandemic in 2020, suggesting repayment stress is increasingly affecting older Americans.
Repayment Pressure Continues To Build
The latest figures come as broader pressure builds across the federal student loan system following the end of pandemic-era relief measures.
More than 7 million borrowers are expected to transition out of the Biden-era SAVE repayment program after a federal court struck down the plan earlier this year. Alternative repayment options generally require borrowers to contribute a larger share of discretionary income toward monthly payments.
At the same time, federal student loan borrowing costs are expected to rise slightly for the 2026-27 academic year. Higher education expert Mark Kantrowitz previously estimated undergraduate federal student loan rates could increase to 6.52% from 6.39%, while graduate student loan rates may rise to 8.07%.
Federal Reserve Bank of New York data previously showed serious student loan delinquency rates had climbed above 16%, while around 7.7 million borrowers were already in default by the end of 2025.
Treasury yields have also remained elevated amid persistent inflation concerns and rising U.S. government borrowing needs, adding pressure to financing costs across the broader economy.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock/ DimaBerlin
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