Student borrowers’ credit scores are taking a hit. Here’s why that matters.

After a years-long pause on student loan repayments, borrowers are now facing credit score declines due to missed payments, with 2.2 million seeing drops of over 100 points in early 2025. This follows the expiration of a grace period that protected borrowers from negative credit reporting, leading to increased borrowing costs and limited access to credit for many, particularly affecting those with previously good scores. Experts warn that these delinquencies may entrench financial disparities, making homeownership and other loans harder to secure for lower-income borrowers.

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