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

With student borrowers back on the hook for repaying their loans after years of government leniency, delinquent borrowers are struggling to pay. As a result, their credit scores are getting dinged, hurting their ability to access future credit. 

Credit scores dropped by more than 100 points for 2.2 million delinquent student loan borrowers from January through March of 2025, according to recent data from the Federal Reserve Bank of New York. For its report, the Fed looked at a borrower delinquency rate based on shares of student loan borrowers with at least one student loan reported as past due or in default. 

Another one million borrowers experienced credit score drops of at least 150 points for the first three months of 2025. A low credit score makes securing future loans both more difficult and more costly, pushing milestones like buying a home, or saving for retirement, further out of reach. It can even impact one's employment prospects.