US Student Loan Delinquencies Hit 8% After Pause

Student loan delinquencies in the U.S. surged in the first quarter of 2025 as federal reporting resumed after a pandemic pause, with loans 90 days or more overdue rising from below 1% to nearly 8%. This contributed to the nation’s overall consumer debt delinquency rate reaching its highest level in five years, according to the New York Federal Reserve. More than 2 million borrowers experienced credit score declines of over 100 points, increasing the risk of wage garnishment and limiting access to other forms of credit. The spike was expected but exceeded forecasts, with particularly severe effects in Southern states and among older borrowers. Delinquency rates for credit cards and auto loans remained stable during this period. The long-term financial impact on affected borrowers remains uncertain.