Newly released data shows a wave of former students entering loan default now that pandemic-era forbearance and collection pauses have fully lapsed, and many of them are recent graduates or young adults who took out loans while still in high school or during an early college attempt. For teens and families thinking ahead about how to pay for school, this moment is a useful, if uncomfortable, case study in what happens when a repayment safety net disappears.

Default isn’t the same as simply being late on a payment. It typically kicks in after a loan has gone unpaid for an extended stretch, and it comes with real consequences: wage garnishment becomes possible, credit scores take a serious hit, and a borrower loses access to the flexible repayment and forgiveness programs that are often available to loans in good standing. A lot of borrowers who are now in default say they didn’t understand their loans were even eligible for income-based repayment plans that could have kept them out of trouble.

That gap in understanding is exactly what families can get ahead of before a student ever signs a loan document. Knowing the difference between subsidized and unsubsidized federal loans, understanding that income-driven repayment plans exist and how to enroll in one, and knowing who to call at a loan servicer before a missed payment turns into a pattern are basic literacy skills that most students never get taught directly.

For a current high schooler, the most useful takeaway from this wave of defaults isn’t fear, it’s specificity. Before borrowing anything for college, know the exact monthly payment at a starting salary in your intended field, and know in advance what options exist if that payment becomes difficult to make.