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Tuesday, July 15, 2025

Student Loan Delinquencies Surge After Covid-19 Payment Pause Ends

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Around 9.7 million student loan borrowers have fallen behind on their payments following the expiration of the Covid-era payment pause, according to a new estimate by the Federal Reserve Bank of New York.

The pause, which ended in September 2023, had provided temporary relief to borrowers. During that time, the Biden administration introduced a 12-month “on-ramp” period, shielding borrowers from most consequences of missed payments. However, this grace period ended on Sept. 30, 2024, and delinquency rates have since soared.

By the conclusion of the off-ramp period, the New York Fed estimates that 15.6% of federal student loans were past due, equating to more than $250 billion in delinquent debt.

The Fed’s report suggests that student loan delinquency is expected to exceed pre-pandemic levels once new delinquencies appear on credit reports. The impact of these delinquencies is significant, with a borrower’s credit score potentially dropping by more than 150 points due to a new student loan delinquency.

This surge in delinquency reflects the ongoing challenges borrowers face as they resume payments, raising concerns over the long-term financial implications for millions of Americans.

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Aryan Jakhar
Aryan Jakharhttps://businessheadline.us/author/journalist-aryanjakhargmail-com/
Aryan Jakhar is a seasoned journalist based in New Delhi, India. He founded Business Headline in 2023 after which in the end of 2024 Business Headline Hindi and in 2025 Business Headline US was established. He covers news related to Business, Finance, Market, Technology and Startups.
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