Roughly 9.7 million student loan borrowers became delinquent on payments after the pandemic-era pause ended, according to a new report from the Federal Reserve Bank of New York. By the close of the “on-ramp” period in September 2024, 15.6% of federal loans were past due—surpassing pre-pandemic levels—with over $250 billion in delinquent debt.
The payment pause began during the COVID-19 pandemic and expired in September 2023. The Biden administration introduced a 12-month transition period shielding borrowers from major penalties, but that expired on September 30, 2024.
The Fed warned that student loan delinquencies could rise even higher once they appear on credit reports, which may trigger a borrower’s credit score to fall by more than 150 points. This could lead to reduced credit limits, higher loan interest rates, and restricted access to credit overall.
The trend could become a flashpoint if Donald Trump moves to dismantle Biden’s student loan relief efforts during his second term.
Source(s)
Discover more from News Facts Network
Subscribe to get the latest posts sent to your email.
