A concerning trend is emerging in federal student loan repayments: nearly one-third of borrowers are now delinquent on their loans, the highest rate since TransUnion began tracking the stat in 2012. That’s up from 21% in February.
For comparison, before the pandemic, only about 12% of student loan borrowers were delinquent.
This jump comes as pandemic-era leniency measures have fully ended, meaning missed payments are now being reported to credit agencies. Delinquent borrowers have already seen an average loss of 60 credit score points so far this year.
Add in ongoing inflation and the rising cost of living, many are struggling to keep up. According to some estimates, as many as 1.8 million borrowers could default on their student loans by the end of the summer, leading to potential wage garnishments or tax refund withholdings.
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