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Millions Face Credit Score Drops Over 100 Points as Student Loan Delinquencies Hit 7.7% and Auto, Credit Card Defaults Rise

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Updated May 30, 2025, 04:57 PM

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In early 2025, millions of Americans have experienced steep declines in their credit scores due to missed student loan payments following the resumption of federal student loan collections by the Trump administration. Over 2.2 million borrowers saw credit scores drop by more than 100 points, with 1 million experiencing declines of 150 points or more. Student loan delinquency rates spiked to 7.7% after the pause on reporting delinquent federal student loans ended. This surge in delinquencies has made borrowing more expensive and challenging amid already elevated interest rates.

Additionally, consumer delinquencies are rising across other credit categories, including credit cards and auto loans. Credit card balances 90 or more days delinquent reached over 12%, the highest since 2011, while auto loan delinquencies hit a five-year high of 5%. Subprime auto loan 60-day delinquency rates reached 5%, surpassing levels seen during the Financial Crisis. Mortgage delinquencies in Ontario also hit record highs, with 90-plus day delinquencies reaching the highest levels since tracking began in 2012. Fitch Ratings has reported weakening performance in US prime credit cards and prime auto asset-backed securities amid economic uncertainty. Experts note that student loan repayment issues are increasingly affecting older borrowers, with only 34% of the 35 million US borrowers with federally managed student loans making repayments as of March 2025. If delinquency trends continue, defaults could reach 12 million borrowers by the end of the year. Meanwhile, the Trump administration is defending a Biden-era policy in the Supreme Court that facilitates loan forgiveness for borrowers defrauded by colleges or universities.

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#Americans #Trump #Financial Crisis #Ontario #Fitch Ratings #US #Biden #Supreme Court

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Sources

cbsnews.com(2)junonews.com(2)supremecourt.gov globalmarketsinvestor.beehiiv.com

Unicus

@UnicusResearch

🚩 Fitch Ratings: US prime credit card performance is weakening amid economic uncertainty. We’ve been sharing with our clients that prime auto ABS have been consistently deteriorating— this is very very bad.

FinancialJuice

@financialjuice

Fitch Ratings: US prime credit card performance is weakening amid economic uncertainty.

Katie Buehler

@bykatiebuehler

NEW: The Trump administration tells the Supreme Court it will defend a Biden-era policy that makes it easier for federal student loan borrowers to get their loans forgiven based on claims they were defrauded by a college or university. #SCOTUS

Story Timeline

1 month ago•Latest version

Millions Face Credit Score Drops Over 100 Points as Student Loan Delinquencies Hit 7.7% and Auto, Credit Card Defaults Rise

1 month ago•Original version

Millions of Americans See Credit Scores Drop Over 100 Points as Student Loan Delinquencies Rise, 19% in Nevada Delinquent

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Millions Face Credit Score Drops Over 100 Points as Student Loan Delinquencies Hit 7.7% and Auto, Credit Card Defaults Rise

Financial Analysis

Associated Financial Markets

Related Prediction Markets

US defaults on debt in 2025?

Another US debt downgrade in 2025?

Will Trump & Elon reduce the deficit in 2025?

Sources

Story Timeline

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