Student Loan Trouble May Keep Young Adults Living at Home

Student loan debt was supposed to be an investment in a better future. But for millions of borrowers falling behind on payments, it may instead be pushing financial independence further out of reach.

Student loan payments are one of several financial pressures — along with high housing costs — that can make it harder for young adults to afford homes of their own.

Newsweek reported that approximately 9.5 million federal student loan borrowers were in default and another 3 million were delinquent at the end of March.

A student loan becomes delinquent when a borrower misses a payment, but the consequences can grow after 90 days.

Once a federal loan is at least 90 days delinquent, the borrower’s loan servicer will report it to the national credit bureaus, potentially damaging the borrower’s credit score.

People with poor credit ratings may struggle to win approval for car loans or mortgages. They may also pay higher interest rates than borrowers with good or excellent credit.

Most federal Direct and FFEL loans enter default after at least 270 days without a required payment. For millions of borrowers, that deadline has already passed.

That number could rise as some of the approximately 3 million delinquent borrowers move closer to default.

There’s No Place Like Home

For a growing share of young adults, moving out of their childhood home — or staying out — has become increasingly difficult.

A recent report from The Wall Street Journal indicates that, in 2025, 49% of adults who had yet to reach the age of 30 said that they lived with a parent. That figure represents an increase of 12 percentage points from where it stood in 2019, the Journal said, citing Federal Reserve data.

Furthermore, almost one-third of the adults under 30 who lived with a parent were at least 25 years old, suggesting that the trend extends beyond recent college graduates.

The Journal pointed out a couple of factors that are influencing what early adulthood looks like for some in the U.S. In addition to carrying significant amounts of student debt, many people face housing costs that exceed what they can afford at this stage of their lives.

Megan Talley, who is 28 years old and lives with her mom, indicated to the Journal that it’s not impossible for young people to venture out on their own, at least for a little while.

“You could do it, but you would be dead broke at the end of the month,” Talley said. “Everything is just out of reach.”

Rent prices have increased in many cities in recent years. Buying also remains expensive. Data from the Federal Reserve Bank of St. Louis shows the median sales price of new houses sold in the U.S. was $403,200 in the first quarter of 2026.

That figure is in line with numbers from recent years, but it’s still far above where it was earlier this decade. The median sales price of new houses sold in the U.S. was $329,000 in the first quarter of 2020.

Keeping Current with Student Loans

Moving back in with their parents after college may help some borrowers cut costs, but falling behind on student loans can create problems that extend well beyond their living arrangements.

Alex Beene, a Financial Literacy Instructor at the University of Tennessee at Martin, told Newsweek of other problems awaiting student loan borrowers who go into default.

“Borrowers are falling into default because the student loan system moved from years of pandemic-era payment pauses into a much more strict repayment environment, with collections and wage garnishment back in force while millions are still confused about what plan they qualify for,” Beene said.

The Education Department delayed involuntary collections in January 2026, and Federal Student Aid currently says administrative wage garnishment and Treasury offsets remain paused.

But borrowers who are struggling to pay back their student loans have strategies they can use to start chipping away at their outstanding balances.

Taking a close look at personal finances may help a borrower uncover some funds they could use to make payments on their student loans.

One such step is to create a realistic budget that a borrower can use to prioritize their most essential expenses and get rid of those they can live without. That process may allow people to uncover some extra cash here and there that they can use to make payments on their loan.

Borrowers can also look to boost their income. Looking for a new job with a higher salary — or asking for a raise at one’s current place of employment — are moves a person can make to earn more money that could be put toward student loan debt.

But finding a side hustle may be a quicker way to attack the problem. Side hustles may sound like more trouble than they’re worth, but many of them can be done from the comfort of one’s home.

Employment website Indeed recently published a list of 60 side hustles one can engage in online. From providing tutoring for college entrance exams to joining an online focus group, young adults have plenty of options they can pursue to supplement their income.

While a side job may not appeal to everyone, the additional income could help some borrowers keep up with their student loan payments and avoid the credit consequences that can make financial independence even harder to achieve.