Student loan borrowers are facing a surprise: their credit scores have dropped significantly since their loans were frozen in October 2024. Some borrowers reported a plunge of over 100 points, even though their payments were temporarily suspended.
According to Washburn University economics professor David Sollars, late payments can severely impact credit scores, with 35% of the score determined by credit history. To address this issue, Sollars advises borrowers to communicate with their loan provider or servicer. Ensuring accurate contact information is crucial, as miscommunication can lead to problems.
If struggling to make payments, Sollars recommends exploring options such as income-derived payment programs, which consider reduced income. However, the Trump Administration has suspended applications for these programs, including Public Service Loan Forgiveness.
Borrowers with frozen loans should check their account status and contact their servicer to resolve any issues affecting their credit score.
Source: https://www.wibw.com/2025/03/06/student-loan-borrowers-see-credit-scores-drop