A recent report by the New York Federal Reserve indicates a dramatic increase in student-loan delinquency rates, with 8.04% of borrowers becoming seriously delinquent in Q1 2025. This rise from 0.8% a year earlier coincided with the end of a five-year pause on credit reporting for delinquent borrowers. The report highlights potential financial repercussions, including wage garnishment and a drop in credit scores for millions of borrowers, which may lead to increased borrowing costs and difficulties in obtaining credit in the future.
In the first quarter of 2025, the share of delinquent student-loan borrowers surged to 8.04%, highlighting the immediate impacts of the end of the credit reporting pause.
The moratorium on credit reporting for borrowers expired in October 2024, leading to an unexpected spike in serious delinquency among student-loan borrowers.
Collection
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