A new analysis has found that the share of Californians late on paying back their student loans has “surged” during the first two quarters of 2025, with regional differences that experts say may reflect economic opportunity differences in the state.

The California Policy Lab, a research institute at the University of California, released a new analysis on Wednesday, Sept. 17, that showed 11% of California student loan borrowers are 30+ days late on paying back their loans. It comes as the U.S. Department of Education announced earlier this year that it was resuming collecting on defaulted loans by early May.

“The share of borrowers who are 30+ days late on paying back their student loans surged during the first two quarters of 2025,” Evan White, executive director of the California Policy Lab’s UC Berkeley site, said in a statement.

Federal student loan payments were paused in 2020 due to the COVID-19 pandemic. Payments resumed in 2023, although borrowers were given a one-year “on ramp” in which they were “shielded from negative credit reporting,” said the U.S. Government Accountability Office.

A California Policy Lab graph tracking the 30-day delinquency rate among borrowers with student loans in California shows the rate hovering anywhere between 2% to 6% in the several years leading up to the pandemic.

Nationally, research by TransUnion released in May found that an all-time high, 20.5%, of student loan borrowers were seriously delinquent, or 90-plus days overdue, through February, USA TODAY reported. That’s compared to 11.5% in February 2020, according to USA TODAY.

Who Is Impacted? California Policy Lab Explains

The California Policy Lab found that the delinquency rate is 12% for Gen X and Baby Boomers, compared to the delinquency rate of 9.4% for Gen Z.

“One possible reason for higher delinquency rates among older borrowers is that they typically owe a larger monthly payment on their student loans,” said the California Policy Lab.

Also, these loans could be for their children’s education, the research institute said.

The California Policy Lab also reported on regional differences in its analysis released on Wednesday.

“Delinquencies in the Central Valley are above 16% but delinquencies in the large urban metros (Bay Area and Los Angeles) are closer to 10%,” the California Policy Lab said. “This disparity may reflect differences in economic opportunity between the coastal and inland regions of the state.”

What Is the Average Student Loan Debt in California, the US?

Education Data Initiative, using federal data, has reported that the average federal student loan debt per borrower is $38,300 in California. Nationwide, 42.7 million borrowers owe more than $1.6 trillion in student debt, according to the U.S. Department of Education.

What Happens if You Don’t Pay Student Loans?

When your loan becomes past due, or delinquent, you risk hurting your credit rating, impacting your ability to get credit cards or other loans, among other challenges, said the Federal Student Aid website. If your loan continues to be delinquent, it can go into default. That’s when borrowers could see some of their paychecks, tax refunds, and federal benefit payments withheld to go toward what they owe and face other financial consequences.

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Paris Barraza is a trending reporter covering California news at The Desert Sun. Reach her at pbarraza@gannett.com.
This article originally appeared on Palm Springs Desert Sun: The number of Californians late on paying back student loans has climbed, analysis finds
Reporting by Paris Barraza, Palm Springs Desert Sun / Palm Springs Desert Sun
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