Key Points
- An estimated 9.2 million borrowers, 26% of those expected to make payments, are now delinquent on student loans.
- Borrowers who miss payments may see credit score drops of up to 129 points, according to VantageScore.
- Student loan borrowers need to check their loan status and take action.
Millions of student loan borrowers may be falling behind on payments, marking the first wave of widespread delinquencies since the federal repayment pause ended. According to a new analysis from VantageScore, an estimated 9.2 million Americans are now delinquent, which is 26% of student loan borrowers expected to be making payments.
With roughly 42.7 million federal student loan borrowers, about 8 million remain in forbearance under the SAVE plan, leaving 34.7 million expected to make payments. The latest figures suggest that nearly one in four of those borrowers have missed payments.
What To Do If You're Impacted? The implications are significant, not just for personal finances, but for credit scores, future borrowing, and broader economic trends. You need to check and monitor your credit regularly to make sure you're not missing a payment.
Here’s what borrowers need to know about these delinquencies, how they may impact credit, and what steps they can take to protect themselves.
Related: Why Student Loan Borrowers Are Seeing 100+ Credit Score Drops
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Why Are Millions Falling Behind?
The surge in delinquencies stems from multiple factors, including confusion over repayment timelines, financial strain, and issues with loan servicers.
End of the “On-Ramp” Period
The student loan payment paused ended in August 2023, but President Biden created an on-ramp period of 12 months to help borrowers.
From September 2023 to September 2024, missed payments were not reported to credit bureaus as part of a government-mandated “on-ramp” to ease borrowers back into repayment.
That protection ended in October 2024, meaning that borrowers who continued missing payments began seeing delinquency notices appear on their credit reports in early 2025.
Court Ruling on SAVE Plan and Confusion
The 8th Circuit Court of Appeals’ ruling against the SAVE Plan added to the confusion.
Borrowers in the SAVE student loan repayment plan (an estimated 8 million borrowers), were placed into an automatic forbearance pending the outcome of the legal case.
However, borrowers on other income-driven repayment plans, such as IBR, ICR, and PAYE, were NOT placed in forbearance and should be making payments normally. To make matters more complicated, though, the Department of Education has paused income driven repayment applications, including income re-certification.
A sub-set of these borrowers were required to re-certify their income over the last 3 weeks, but have been unable to, forcing them to return to forbearance or face higher loan payments. This issue is expected to be resolved, but in the meantime, it just adds to the chaos.
Loan Servicer Communication Issues
Reports from borrowers suggest poor communication from servicers has led to missed recertification deadlines, unclear payment notices, and unexpected changes in due amounts.
Some borrowers who assumed their accounts were in forbearance discovered too late that payments were required.
This stems from a variety of reasons, from borrowers not having updated address and contact information, to loan servicers not sending notices about recertification dates changing.
How Delinquency Affects Credit Scores
Borrowers who fall behind on payments may see credit score declines of up to 129 points, according to VantageScore’s latest research. This drop can impact:
- Access to credit cards, auto loans, and mortgages
- Interest rates on new loans (higher rates for lower scores)
- Job opportunities, as some employers check credit reports
- Housing applications, where landlords review credit history
The average U.S. credit score is projected to drop from 702 to 700 due to these delinquencies, marking a nationwide shift in creditworthiness.
How Borrowers Can Prevent Delinquency And Protect Their Credit
For borrowers struggling to keep up, there are several options to avoid falling further behind.
1. Check Your Loan Status
Borrowers should log into their loan servicer accounts or visit StudentAid.gov to confirm:
- If and when payments are due
- What repayment plan they are enrolled in
Those who believe they were incorrectly marked delinquent should contact their loan servicer immediately.
2. Enroll in an Income-Driven Repayment (IDR) Plan
For those struggling with high payments, IDR plans can cap monthly payments based on income and family size, sometimes lowering payments to $0 per month. Options include:
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
- Pay As You Earn (PAYE)
While the SAVE plan remains blocked, other IDR plans are still available. Borrowers should apply as soon as applications reopen.
⚠︎ Income-Driven Repayment Plan Enrollment Is Currently Paused
Income-driven repayment plan application processing is currently paused for at least 90 days. Learn more about what to expect here.
3. Request Forbearance or Deferment
For borrowers who cannot afford any payment, requesting a temporary forbearance can pause payments, though interest may continue to accrue. Deferment may be available for those who:
- Are unemployed
- Face economic hardship
- Are enrolled in school at least half-time
4. Dispute Incorrect Late Payments
Borrowers who believe their delinquency status is incorrect can dispute it with credit bureaus (Experian, Equifax, and TransUnion) or request goodwill removal from their loan servicer. Some have had success reversing negative marks, especially if it was a servicer error.
Related: The Fair Credit Reporting Act And Your Student Loans
5. Monitor Credit Reports
Checking credit reports regularly can catch errors early. Borrowers can access free reports at AnnualCreditReport.com and use credit monitoring services to track score changes.
With delinquencies rising and more borrowers expected to exit forbearance in 2025, student loan repayment challenges are far from over. The ongoing legal fight over SAVE, continued miscommunications, and financial hardship could mean millions more face delinquency in the coming months.
For now, the best course of action is staying proactive: checking loan status, exploring repayment options, and seeking assistance before falling behind.
While credit score drops are already impacting many, avoiding further damage can help borrowers rebuild financial stability in the months ahead.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.