About one out of every ten California student loan borrowers is at least 30 days late on payments following the end of a federal pause on loan payments, according to a new analysis released Wednesday.
The nonpartisan California Policy Lab at the University of California, Berkeley, found that delinquencies surged during the first half of 2025, with the highest rates among older borrowers. Baby boomers and Gen Xers face a 12% delinquency rate, compared to Gen Z’s 9.4%, the study said.
Before the COVID pandemic, the state average for student loan delinquencies was 3.7%, while today, the delinquency rate has spiked to 11%, the research showed.
Older borrowers also typically owe more each month, with boomers averaging $101 in payments – triple that of millennials and five times the typical Gen Z payment, according to the report. The CPL suggested this may include loans taken for both personal and children’s education.
End of student loan forgiveness
The federal government’s pause on student loan payments because of the pandemic ended two years ago, but borrowers were given a one-year “on-ramp” to resume payments. In April, the Department of Education announced that collections on student loans would start again, and previous CPL research indicated that a large portion of borrowers were likely to struggle to repay their student loans once payments resumed.
Delinquency rates are highest in the state’s rural, lower-income areas, such as the Central Valley, where 16% of borrowers are behind, compared to about 10% in urban regions like the Bay Area and Los Angeles. Researchers said the trend reflects disparities in economic opportunity between inland and coastal regions of the state.
Amount of student loan payments drops
The analysis also showed that the amount of monthly student loan payments has dropped overall, with the average payment at $38, down sharply from the pre-pandemic average of $64. The decline is attributed to a larger share of borrowers using income-driven repayment plans, in addition to some borrowers having debt forgiven by the Biden administration. The passage of the recent federal budget bill, which phases out several repayment plans for a plan with less favorable terms, could reverse the trend, the report said.
Researchers also pointed to a potential silver lining in the analysis, saying new student loan originations are down. California’s newest college borrowers took out an average of $13,200 for the year, a 23% decrease from last year, possibly reflecting a shift toward more affordable schools.