Student loan debt is crushing millions of Americans. Delinquencies are on track to set new records, adding to this increasing financial strain. The Trump administration's recent actions have further complicated borrowers' efforts to manage their debt, leading to a critical situation. More than 9 million borrowers will likely experience an immediate credit score decrease in the first quarter of this year. This loss can create a shocking economic blow for millions. The 2025 Student Loan Update reported an alarming 15.6% of federal loans were past due by the end of last year, contributing to the $250 billion in delinquent debt held by 9.7 million borrowers.
The Federal Reserve Bank of New York just put out its latest student loan borrowing report, done on a biennial basis. This report exposes these problems in grisly detail. This comprehensive report, which tracks debt loads, delinquencies, and the related impacts on credit scores, highlights the growing challenges faced by borrowers. The only good news is that new delinquencies are one of the most damaging things to a credit score. On an average score drop, subprime borrowers lose 87 points. Those with superprime or excellent credit are experiencing the largest drop-offs. On average, their credit scores are decreasing by 171 points.
Taken altogether, these findings continue to demonstrate the dire need for impactful policy actions at a time of unprecedented strain on student loan borrowers. Delinquencies are increasing as well, further exacerbating stress on our financial system. This trend has serious consequences for both individual borrowers and the economy as a whole. The report's insights into debt loads and credit score impacts provide valuable data for policymakers and financial institutions seeking to develop solutions.