An estimate by the Federal Reserve Bank of New York indicates that 9.7 million student loan borrowers became past due on their payments after the Covid-era payment pause ended. Following the expiration of the federal student loan payment pause in September 2023, the Biden administration provided borrowers with a 12-month transition period to repayment. During this time, borrowers were protected from most consequences of falling behind on payments. This relief period ended on September 30, 2024.
By the conclusion of the transition period, the New York Fed estimated that 15.6% of federal student loans were past due, amounting to over $250 billion in delinquent debt. The report suggests that student loan delinquency could surpass pre-pandemic levels as new delinquencies are reported. A new student loan delinquency can reduce a borrower’s credit score by more than 150 points.
— news from CNBC