Millions of borrowers from student loans face a decrease in credit with the resumption of payments

A new report issued by Americans’ credit card debts in New York, while the credit card debts decreased Student loan It causes credit degrees to decline.

The Federal Reserve Data Center in New York Partial Economy Data issued a quarterly report that showed that the debts of living families had increased by $ 167 billion – with credit card debts a decrease of 29 billion dollars. The report indicated that the decreasing credit card is a typical seasonal pattern as consumers pay the debts of holidays from the end of last year.

However, the report indicated that the student loan rate rate increased from less than 1 % to approximately 8 % after the end of stopping in reporting the loan of delinquent students.

Student loan payments were stopped from the beginning of the Covid-19 in early 2020 to September 2023, which helped to decrease the jewel to less than 1 %. When student loan payments were resumed, politicians included a one -year decline for a period of one year aimed at preventing them The past payments for borrowers From reporting credit offices. The validity of this ended in October 2024, with the inclusion of wings in credit reports in the first quarter of 2025.

Borrowers begin in student loans in the face of debt groups

The report found that although more than half of the newly late borrowers have already had a sub -real estate mortgage Credit scoresAbout 2.4 million borrowers who entered delinquency this year have received more than 620, which could allow them to qualify for automotive and mortgage loans, as well as credit cards, before reporting delinquency.

There were 3.2 million borrowers whose degrees were less than 620, and they represented 56.6 % of the newly deliberate population. They saw a decrease in their credit score at a rate of 74 points on average.

What will be the credit card roof effect?

Borrowers represent one of the borrowers with degrees in the range of 620 to 719 35.9 % of the new jewel, and their credit grades decreased by 140 points. There were only 400,000 borrowers with credit grades over 720 who entered a delinquency, representing 7.5 % of this group, and their degrees decreased by 177 points.

In general, more than 2.2 million borrowers of students ’loans who entered a delinquency in the decrease in credit scores by more than 100 points, while witnessing at least a million points at least 150 points.

Here is the reason for the decrease in the degree of credit in the United States

The report found that seven states have a conditional student loan rate – excluding borrowers who do not have a due boost – higher than 30 %, including Mississippi (44.6 %), Alabama (34.1 %), Western Virginia (34 %), Kentucky (33.6 %), Oklahoma (33.6 %), Arkanasa (33.5 %).

At the end of the first quarter, there were no more than 20 million borrowers of the federal student loans in payment, and five million had a zero monthly payment.

“After a five -year stalled, the delinquency of the” normal “student loan returned before the recipe with more than 10 percent of the balances and about six million borrowers either in the past or the failure to pay.

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He pointed out that the process of groups that resumed in May includes “wage decorations, tax declarations, and Social security payments“

“In addition, millions of borrowers face sharp declines in their credit position, which will increase borrowing costs or seriously limit their access to credit such as real estate loans and car loans.” New York Federal Reserve I noticed that adding this will monitor if these payment problems will be launched to other categories of consumer credit.