2.2 million borrowers saw credit scores drop over 100 points in early 2025 after the government stopped protecting student loan accounts from negative reporting. The Department of Education and loan servicers began reporting missed payments retroactively, with about 1 million people hit with 150+ point drops.
2.2 million borrowers
About 1 million borrowers
2020 (COVID-19 pause)
October 2024
What we're seeing right now with student loans is unprecedented. 2.2 million student loan borrowers saw their credit scores drop by more than 100 points just between January and March of 2025. Another million people, their scores dropped 150 points or more. Think about that for a second. If you had a 700 credit score, which is considered good, you could now be sitting at 550. That's the differ between qualifying for a mortgage and being denied for a basic credit card. Back in 2020, the government hit pause thanks to Covid with no required payments, no interest and no late payments reported. And then came a 12 month grace period where missed payments still wouldn't hurt your credit. But that all ended in October of 2024. Now there's no more protection. The Department of Education and loan servicers are now everything to the credit bureaus and they're doing it retroactively in many cases, which is why people are waking up to devastated credit scores with no warning.
