Your Money Minute Student Loan Debt Crushes Credit 5/26/25
May 26, 2025
The discussion highlights the alarming rise in student loan delinquencies following the end of pandemic-related payment pauses. Millions of borrowers are at risk of credit score impacts as household debt in the U.S. surges to a staggering $18.2 trillion. The potential economic implications of this growing debt load are explored, making it clear that many are feeling the financial squeeze.
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Spike in Student Loan Delinquencies
- The end of a nearly five-year pandemic pause led to a spike in student loan delinquencies.
- This surge is pushing U.S. household debt to record highs, affecting credit reports significantly.
Student Loans Damage Credit Scores
- Student loan delinquencies can reduce credit scores by up to 150 points.
- Falling into subprime categories limits access to credit and can hurt job prospects due to employer credit checks.
Record High Household Debt
- Americans' total household debt, including student loans and other credits, now hits a record $18.2 trillion.
- This highlights the combined financial weight of multiple types of consumer debt.