Millions of Americans' Credit Scores Drop Due to Rising Student Loan Delinquencies

Millions of Americans saw their credit scores significantly drop from January to March 2025, largely due to failing to pay student loans after the government unpaused federal student loan repayments.

The Details: Nearly six million student loan borrowers, or about 14%, were 90-plus days delinquent or in default during this year’s first quarter, according to a report from the Federal Reserve Bank of New York. About 2.2 million recently-delinquent borrowers have seen their scores drop over 100 points, and over 1 million additional borrowers have seen drops over 150 points.

For Context: The federal government paused student loan repayment requirements at the beginning of the COVID-19 pandemic and fully reinstated repayment requirements in October 2024. This has significant potential effects on the economy, as low credit scores may prevent millions of Americans from making large purchases such as homes and cars. 

How the Media Covered It: Newsweek (Center bias) quoted financial experts highlighting the economic consequences of student loan delinquencies, including the LendingTree Chief Consumer Finance Analyst saying that bad credit ”can literally cost you tens of thousands of dollars or more over the course of your life.” Washington Post (Lean Left) included the experience of an individual who was denied an automobile loan because of a $440 missed payment about which she claims the Education Department never notified her. Fox Business (Lean Right) noted that nearly 56.6% of newly-delinquent borrowers had subpar credit scores before loan repayments were reinstated.

Revised by the AllSides staff (of humans) after a first draft from our custom AI. Learn more. Support our mission. Suggest an improvement to this summary.