The damage will remain on their credit reports for seven years, said experts at the Federal Reserve Bank of New York.
An estimated 9.7 million federal student loan borrowers have fallen behind on their repayments since the end of the pandemic-era freeze, according to the Federal Reserve Bank of New York.
The Fed warns in an analysis released on Wednesday that those with outstanding loans that are not being paid back “will face significant drops in credit score once delinquencies appear on credit reports in the first half of 2025. ”
The freeze on student loan repayments and interest was first implemented by President Donald Trump in 2020 to ease financial burdens on Americans at the onset of the COVID-19 pandemic. It was extended multiple times under both the Trump and Biden administrations before officially ending in September 2023.
This was followed by a one-year “on-ramp” period, during which the Department of Education…
