Student loan delinquency just hit 25% — nearly triple the pre-pandemic rate
Summary
Federal student loan delinquencies started hitting credit reports again in 2025, after years of pandemic-era protection. The delinquency rate has since climbed to 25% of all loans with payments due — up from 9.2% before the pandemic. Defaults are accelerating fast, and for borrowers who cross that line, the damage is severe: an average 91-point credit score drop.
Follow the delinquency rate
The first student loan delinquencies in years began appearing on credit reports in early 2025. Less than twelve months later, the share of loans past due had climbed far beyond where it stood before the pandemic ever started.
View data as table
| 2019 (pre-pandemic) | 9.2% | of loans with payments due |
|---|---|---|
| Dec. 2025 | 25% | of loans with payments due |
A quarter of all loans with a payment due are now delinquent — nearly three times the 9.2% rate in 2019, according to credit-bureau data analyzed by The Century Foundation. More than 17% of all federal borrowers have fallen at least 90 days past due at least once since reporting resumed, the New York Fed reports. Defaults are compounding quickly on top of that: an estimated 1 million borrowers defaulted in the last quarter of 2025 alone, and the total climbed by another 1.3 million in the first quarter of 2026. The Education Department's own portfolio data shows about 9 million borrowers, holding $220 billion in loans, already in default — more than 13% of everything the department directly holds.
The same system, counted in credit score
A missed payment is a number on a statement. A default follows a borrower into every other part of their financial life, and the credit data shows exactly how much it costs.
View data as table
| 2024:Q3 | 567 | avg. credit score, before default |
|---|---|---|
| 2025:Q4 | 476 | avg. credit score, after default |
Borrowers who defaulted saw their average credit score fall 91 points in about a year — from 567, already subprime, to 476, deep subprime, per the New York Fed's analysis of its Consumer Credit Panel data. Even borrowers who fell delinquent without reaching default weren't spared: their scores dropped an average of 57 points, and three-quarters of them landed in deep-subprime territory too, The Century Foundation's analysis of TransUnion data found. Those scores follow people into every apartment application, car loan, and credit card decision they make next.
Collection consequences are catching up as well, on a start-stop timeline. The Education Department began moving defaulted loans back into active collections in mid-2025, and by January 2026 it had sent the first wage garnishment notices to about 1,000 borrowers, with plans to scale up monthly, as NPR reported. The department then paused tax refund seizures and wage garnishment that same month, with the pause expected to last roughly until mid-2026 — around now. When it lifts, the department has projected that default numbers could keep climbing toward nearly a quarter of all federal borrowers.
The takeaway
- The pandemic pause didn't erase the underlying problem — it delayed it. Delinquency at 25% isn't a return to normal; it's nearly three times the pre-pandemic baseline, arriving all at once as protections lifted.
- Default is a credit event, not just a loan event. A 91-point average score drop pushes borrowers from subprime to deep subprime, with consequences well beyond the loan itself.
- Collections are paused, not canceled. Wage garnishment and tax refund seizure stopped in January 2026 but are expected to resume around mid-2026, right as default counts are already climbing toward a quarter of all borrowers.
Delinquency and default figures reflect the most recently reported national data as of March 31, 2026; the Education Department updates portfolio-level default and collections figures on an ongoing basis.
Sources
- The Century Foundation — TransUnion credit-bureau data on the 25% Dec. 2025 delinquency rate and the 57-point score drop for delinquent (non-defaulted) borrowers. tcf.org
- Federal Reserve Bank of New York, Liberty Street Economics (May 2026) — the 90-day-plus delinquency share and the 91-point average credit-score drop after default. libertystreeteconomics.newyorkfed.org
- Federal Student Aid (studentaid.gov) — Education Department portfolio data on borrowers and loan balances in default. studentaid.gov
- U.S. Department of Education — press release announcing the resumption of federal student loan collections. ed.gov
- NPR — the first wage-garnishment notices sent to defaulted borrowers, Jan. 2026. npr.org
- U.S. Department of Education — press release pausing tax refund seizures and wage garnishment. ed.gov
- NPR — the Education Department's projection that defaults could climb toward a quarter of all borrowers. npr.org
Comments
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For three and a half years, federal student loan borrowers who fell behind faced no real consequence — payments were paused, then delinquencies weren't reported to credit bureaus even after payments resumed. That protection ended in 2025. The numbers since then show what had been building underneath it.