On-site wastewater treatment systems are known to be sources of aquatic pollution; however, limited data precludes systems level assessments. Aerobic treatment units (ATUs) are widely utilized in Louisiana, where groundwater and soil conditions limit septic tanks. By combining a limited ATU permitting record with housing unit build data, we estimate there were 412,552 permitted ATUs in Louisiana by end of 2023. We conservatively estimate the annual surface water loading from ATUs in the 24 coastal parishes is 7.51 million pounds of nitrogen, and 2.18 million pounds of phosphorus, which are equivalent to 57% and 84%, respectively, of the nitrogen and phosphorus discharged by all the major wastewater treatment plants in Louisiana. Despite a state-wide ATU utilization rate of 73.7%, our analysis of policy documents indicates ATU management in the two coastal parishes with the highest number of ATUs is best described as “basic” with limited compliance monitoring, enforcement, and public awareness. Simultaneously, we estimate the deployment of Environmental Impact Bonds premised on nutrient recovery and optimized energy consumption could be sufficient to fund routine ATU inspection and maintenance programs. Our findings strongly suggest the on-site wastewater treatment status quo jeopardizes water quality at scale demanding the pursuit of creative solutions.