Millions of Americans are experiencing a significant drop in their credit scores due to unpaid student loans. An analysis by the Federal Reserve Bank of New York found that over 2.2 million borrowers saw their credit scores plummet by more than 100 points, and another 1 million faced drops of 150 points or more.
This drastic decline is comparable to the credit score drop seen after a personal bankruptcy filing. According to researchers, nearly 2.4 million Americans had previously been eligible for car loans, mortgages, and credit cards with favorable credit scores before their delinquencies were reported. This development is concerning, especially during a vulnerable time for the US economy.
Source: https://www.washingtonpost.com/business/2025/05/25/credit-score-student-loan-elinquency-debt