It's even worse than it sounds.

The default figure understates the true amount of distress. The Education Department counts a borrower as being in default only once she has gone 361 days without a payment, and the Obama administration doesn't make public the number of borrowers who are defaulting on federal student loans made by other lenders in a since-discontinued bank-based program.

The White House has touted income-based repayment plans as the solution to halting the relentless rise in defaults. The administration's goal is a "zero default rate," Education Undersecretary Ted Mitchell said last year. But loan defaults are up 2.7 percent through the first three fiscal quarters of this year compared with 2015, federal data show.

More Borrowers Experiencing Payment Shocks

Borrowers are required to share their earnings information with their loan servicers annually if they are to keep making payments tied to their income, but not all borrowers do so, for reasons ranging from forgetfulness to servicer errors.

The result: much higher required monthly payments. About a quarter of debtors now enrolled in the government's income plans no longer are actually making payments based on their income, putting them at higher risk of default.

The Education Department previously seemed to blame servicers, promising to rewrite their contracts so they'd prioritize helping distressed borrowers over collecting payments. But it now says debtors are to blame. "Borrowers have a responsibility not to miss payment deadlines," said spokeswoman Kelly Leon.

Borrowers Are Taking Longer to Repay Their Debt

More than half the debt carried by borrowers is scheduled to be repaid more than a decade after the bills first came due—a reversal from four years ago, when most debt was scheduled to be repaid within 10 years.

This is largely due to greater enrollment in income-based repayment plans, which stretch out payments to 20 or 25 years. As a result, Americans are now carrying substantial amounts of student debt well into their 40s and 50s, according to the Federal Reserve Bank of New York.