WSJ Your Money Briefing
Why Millions of Student Borrowers Could See a Big Drop in Their Credit Scores
Apr 2, 2025
Oyin Adedoyin, a Wall Street Journal reporter and expert on student loan debt, dives deep into the troubles facing over 9 million borrowers as student loan payments resume. She discusses how this resumption can lead to significant credit score drops, particularly affecting those who have maintained good credit. Adedoyin highlights rising delinquency rates and offers practical advice on monitoring credit and managing overdue balances. It's a crucial conversation for anyone navigating the financial repercussions of student loans.
10:09
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Quick takeaways
- Over 9 million student loan borrowers risk a credit score drop as repayments resume, highlighting the importance of loan management strategies.
- Borrowers are encouraged to monitor their credit scores and consider deferment options to mitigate negative impacts from delinquency rates.
Deep dives
Impact of Student Loan Delinquency on Credit Scores
Over 9 million student loan borrowers are facing significant drops in their credit scores due to the resumption of loan repayments after a prolonged pause during the pandemic. Reports indicate that about 43% of borrowers have not yet resumed payments, leading to unprecedented delinquency rates. Higher credit scores are more adversely affected; for example, individuals with scores above 760 are projected to experience a decline of approximately 171 points, while those with scores under 620 might see a drop of 87 points. This stark contrast underscores the urgent need for borrowers to actively manage their repayment responsibilities to mitigate harmful impacts on their credit health.
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