How much does missing student loan payments hurt your credit score?
CBSN
A U.S. freeze on federal student loan payments during the COVID-19 pandemic has offered a vital financial reprieve to millions of Americans. But borrowers could soon be on the hook again, with the moratorium set to lapse at the end of the month.
More than 79% of those with student debt — a total of 30 million people — saw their credit scores improve during the pandemic, according to a report this week from the Federal Reserve Bank of New York. Nearly 8 million borrowers boosted their scores enough to jump to a higher credit tier.
"The pandemic repayment pause drastically reduced delinquency and default on student loans, so we've seen increases in credit scores across the distribution of student debtors," said Marshall Steinbaum, senior fellow in higher education finance at the Jain Family Institute. "Student debtors' credit scores have risen across the board, but they have increased the most for the least well off student debtors."
