More than 9 million student loan borrowers have missed at least one payment this year, driving total delinquencies to $1.7 trillion, according to the Financial Stability Oversight Council’s (FSOC) annual report. FSOC said the spike has caused steep declines in credit scores, potentially making it significantly harder for affected borrowers to access new loans or finance major purchases such as cars and homes.
The surge in delinquencies comes after the federal pandemic-related student loan payment pause ended in late 2023, with credit reporting for missed payments resuming one year later. During the pause, which began in early 2020, delinquency rates were historically low. The resumption of payments and reporting revealed pent-up arrears, with student loans now standing out as one of the most pronounced stress points in the household credit landscape.
The increase in delinquencies is occurring as the labor market has cooled for younger Americans. Recent graduates and early-career borrowers are struggling to find stable employment and sufficient income to cover loan obligations. Charlie Wise, SVP and head of global research and consulting at TransUnion, told the Financial Times that “they just don’t have the money,” noting that weaknesses in the jobs market for recent graduates are contributing to the rising delinquencies.
While about a third of borrowers have returned to their current status, FSOC cautioned that “adverse credit impacts can persist long-term, increasing borrowers’ costs for other credit lines and limiting their access to new loans.”
The Federal Reserve Bank of New York reported similar data. It said about 9.4% of the $1.65 trillion in outstanding student loan debt was more than 90 days past due in Q3 2025, a sharp increase from pre-pandemic levels below 1%.
Household debt overall is also rising. Credit card balances climbed 5.9% over the past year to $1.2 trillion, representing 4% of GDP — above pandemic levels but below pre-financial crisis peaks. Student loan balances increased 3.3% to roughly $1.6 trillion, or 5.2% of GDP, down from a pre-pandemic high of 7.7%.
FSOC also noted that delinquent student loan borrowers currently hold $387 billion in total consumer debt, primarily concentrated in student loans ($186 billion) and mortgages ($132 billion). While these amounts are modest relative to the $18 trillion in aggregate consumer debt, they remain a significant concern for household balance sheets and borrowing capacity, the FSOC said.
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