A growing number of student loan borrowers are falling behind on their payments after the pandemic-era pause ended. This surge in delinquencies is having a significant impact on individuals' credit scores and overall financial well-being. A lower credit score can make it difficult to qualify for loans for cars, homes, or even credit cards. Landlords may also be hesitant to rent to individuals with poor credit.
Economists are concerned that this trend could negatively affect the broader economy. As student loan payments become a burden, borrowers may have less money to spend on other goods and services. This reduction in consumer spending could slow down economic growth. Several factors contribute to the problem, including rising inflation, stagnant wages, and the sheer volume of student loan debt many Americans hold. Experts recommend borrowers explore options like income-driven repayment plans to help manage their debt and avoid delinquency.
Student Loan Delinquencies Rise, Impacting Millions
Millions of Americans are struggling to keep up with their student loan payments, leading to a rise in delinquencies. This financial strain is causing credit scores to drop, making it harder for borrowers to access loans, rent apartments, or make large purchases. Experts worry this trend could further slow down the U.S. economy as consumers reduce spending.