Almost 300,000 North Carolina College Borrowers are in Default, Owing Billions
“About half of those people, owing an average of $26,500, have gone into default just since last September.”
This is probably true in multiple states. Imagine the numbers for California.
WRAL News reports:
Nearly 300,000 North Carolina college-goers are in default, owing billions in student loans
Nearly 300,000 North Carolina college-goers have defaulted on their federal student loans, collectively owing $7.8 billion, data analyzed by the Associated Press shows.
About half of those people, owing an average of $26,500, have gone into default just since last September.
Since then, federal policies on student loans have changed and some repayment options are gone or about to go away. At the same time, the number of federal employees working on students loans has been slashed, noted Julia Barnard, a former ombuds for the Consumer Financial Protection Bureau. Record complaints have come in, and many borrowers are being given varying information about how much they actually owe, Barnard told WRAL News.
That, paired with affordability issues more broadly, lead Barnard and other experts to project the numbers will only grow.
“It’s going to get a lot worse before it gets better,” Barnard said.
Nationally and in North Carolina, about one in every five borrowers is in default. About the same number — but not necessarily the same people — was not actively repaying their loans during the second quarter of 2026, the last data available.
In North Carolina, for-profit career colleges and smaller private colleges had the highest shares of borrowers not repaying their federal loans. About 42% of borrowers from for-profit schools aren’t repaying their loans.
Some of the North Carolina colleges with the highest rates of borrowers not repaying were cosmetology schools or other trade schools that have shut down. But student loans come from the federal government or private banks, not the schools themselves. So people must still repay their loans if the schools close down, or if they don’t graduate.
Beyond those in default, hundreds of thousands more borrowers are months behind on payments, and another surge in defaults could be on the way. Millions of borrowers are facing higher monthly payments as the government dismantles its most affordable income-driven repayment option, the SAVE plan, one of several changes the Education Department says are intended to simplify a fragmented system.
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Comments
300,000 in one mid sized state. That is a lot.
How many of these loans were for styrofoam majors?
Bush the younger’s law that student loans are non-dischargable in bankruptcy ranks highly among his many bad decisions.
It was the best decision and needs to stay in place. Any person who takes money from the taxpayer to better his station and earn more money has an obligation to pay back what the taxpayer funded. The fact that universities are inefficient and have nonsense degrees is not the fault of the taxpayer. Those who took out loans that are in default need to be banned from all welfare, and have all tax refunds absorbed by the treasury and the feds can start seizing assets. No more funding of deadbeats. No more federal dollars to universities or student loans.
If the universities had to underwrite the loans, we might have a better outcome. Loans should be given based on the probability that the degree received will be able to repay the debt. Time to get rid of worthless.
Academic programs.