Fact Check: "Credit scores have declined steeply for millions since student loan payments resumed."
What We Know
Since the resumption of student loan payments in 2023, millions of Americans have experienced significant declines in their credit scores. The U.S. government resumed reporting missed payments to credit bureaus after a long pause due to the COVID-19 pandemic. According to a report by the Associated Press, after 90 days of non-payment, student loan servicers report delinquent accounts, which can severely impact credit ratings. The Federal Reserve Bank of New York indicated that in the first three months of 2025, approximately 2.2 million borrowers saw their credit scores drop by 100 points, and an additional 1 million experienced drops of 150 points or more (AP News).
The resumption of payments has led to a situation where about one in four borrowers were reported to be more than 90 days behind on their payments by the end of March 2025 (AP News). This decline in credit scores can have serious repercussions, making it more difficult for individuals to secure loans, mortgages, or even rental agreements, especially during a time of economic strain characterized by high inflation and interest rates (AP News).
Analysis
The claim that credit scores have declined steeply for millions since the resumption of student loan payments is supported by multiple credible sources. The New York Times reported that millions of borrowers have seen their credit scores plunge in recent months, with loan servicers warning of a record number of borrowers at risk of defaulting. This aligns with findings from the Washington Post, which noted that even borrowers with previously good credit ratings have seen significant drops due to missed payments.
The evidence indicates that the abrupt transition back to payment obligations has caught many borrowers unprepared, leading to widespread delinquency. The USA Today article highlights that many borrowers are struggling to incorporate these payments into their budgets after a five-year pause. This situation is exacerbated by the complexity of the repayment options and the bureaucratic challenges faced by borrowers, as noted by various experts (New York Times).
The reliability of these sources is high, as they include established news organizations that have reported extensively on the implications of student loan payment resumption. The data from the Federal Reserve Bank of New York adds an additional layer of credibility, providing statistical evidence of the credit score declines.
Conclusion
The verdict is True. The evidence clearly shows that credit scores have indeed declined steeply for millions of Americans since the resumption of student loan payments. The combination of reported delinquencies, significant drops in credit scores, and the broader economic context supports this claim. The situation reflects a critical challenge for borrowers who are now facing financial pressures in a recovering economy.
Sources
- Credit scores decline for millions as US student loan collections restart
- Millions of Student Loan Borrowers Are Behind on Payments
- Student loan missed payments causes credit score drop for ...
- Credit scores crash after student loan payments resume nationwide
- Credit scores decline for millions as U.S. student loan collections ...
