Student loan delinquencies are set to hit an all-time high, with over 9 million borrowers at risk of seeing their credit scores plummet in early 2025, according to a new report from the Federal Reserve Bank of New York.
The bank’s 2025 Student Loan Update, released Wednesday, revealed that 15.6% of federal loans—totaling more than $250 billion—were past due by the end of last year. This marks a record level of delinquency following the expiration of the federal repayment “on-ramp” period, which had temporarily shielded borrowers from penalties for missed payments.
Credit score impacts could be severe, with subprime borrowers losing an average of 87 points and superprime borrowers seeing drops of up to 171 points due to delinquent loans.
The growing burden comes amid uncertainty over the Trump administration’s approach to student debt, including potential Department of Education shutdowns and a temporary freeze on income-driven repayment applications—moves that could further complicate borrowers’ ability to stay on track.
Keep up with this developing story on Que Onda Magazine.