New Delhi, September 16 (Patrika English News): Student loan borrowers in the United States are defaulting at the fastest pace on record, according to a new credit trend report released Tuesday by Fair Isaac Corporation (FICO).
The report shows that more than 10% of consumers with student loans have not made a payment for over 90 days. Out of 21 million consumers reviewed, 3.1% — or 6.1 million borrowers — were flagged with student loan delinquencies between February and April.
This marks a sharp rise from April 2024, when the delinquency rate stood at 7.9%. The latest figure of 9.8% represents a 25% year-on-year jump, the report added.
The impact on borrowers’ credit scores has been severe. On average, consumers with delinquent loans saw their FICO scores drop by 69 points, pushing many below the 600 mark. About a quarter of these borrowers experienced score declines of more than 100 points.
FICO attributed the steep drop to the “recency and severity” of missed payments, which form around 35% of its overall credit scoring calculation.
The data also highlights generational pressures. Gen Z borrowers — 34% of whom hold student loans, double the overall average — recorded the steepest year-over-year score declines since 2020.
Federal student loan delinquencies began appearing on credit reports again in February 2025, after the U.S. Department of Education ended a pandemic-era pause and a temporary “on-ramp” relief period that had shielded missed payments from being reported.