School Loan Delinquencies Back Up

Student (school) loan delinquencies in the U.S. have climbed back to roughly pre‑pandemic levels, with on the order of six million borrowers now past due and clear signs of rising financial stress for many households. This jump is showing up in credit data in 2025 because special protections that had been shielding missed payments from credit reports expired in late 2024.​

What “back up” means now

• Around 16% of student loan borrowers are at least 60 days late on payments, which translates to nearly 6 million people past due, similar to conditions before the 2020 payment pause.​

• Federal data and independent analyses show student loan delinquencies reappearing on credit reports in early 2025 after the end of the 12‑month “on‑ramp” that had temporarily prevented missed payments from being reported.​

Why delinquencies are rising

• Required payments restarted in October 2023, but many borrowers faced higher living costs, other debt, and confusion about new repayment programs, leading some to miss or delay payments once credit-reporting protections ended.​

• As collections on defaulted federal loans resume and older delinquencies roll into default status in 2025, the number of borrowers in serious trouble (90+ days late or in default) is expected to rise further absent additional relief.​

Broader financial impact

• Rising student loan delinquencies are contributing to a broader upswing in consumer credit stress, with mid‑ and late‑stage delinquencies across credit products at or near multi‑year highs.​

• For affected borrowers, worsening student loan status can lower credit scores, make it harder or more expensive to get mortgages, car loans, and credit cards, and crowd out spending on housing and other essentials.​

What borrowers can do

• Federal borrowers who are struggling can look into income‑driven repayment plans, consolidation, or rehabilitation (for those already in default), and should contact their servicer or use the official StudentAid.gov site for options rather than third‑party “debt relief” companies.​

• Staying below 30 days late where possible, or quickly curing an early delinquency, can reduce long‑term damage to credit compared with letting loans roll into 90‑day‑plus delinquency or default.​

Which states have the highest student loan delinquency rates

Several Southern states currently have the highest student loan delinquency rates, with Mississippi, Alabama, and West Virginia standing out as the most severely affected. In many of these states, roughly one‑third or more of borrowers with student debt are at least 90 days past due on at least one loan.​

States with highest rates

Recent analyses using Federal Reserve Bank of New York data show that:​

• Mississippi has the highest share of borrowers with at least one student loan 90+ days delinquent, at about 45%.​

• Alabama and West Virginia follow, with roughly one‑third of borrowers seriously delinquent on at least one student loan.​

Regional pattern

• The concentration of serious student loan delinquency is highest in the South, with seven Southern states exceeding a 30% conditional delinquency rate among borrowers.​

• By contrast, some Northeastern states such as Massachusetts, Connecticut, and New Hampshire have notably lower student loan delinquency shares, generally under 15% of borrowers with a 90‑day‑plus delinquent loan.​

Why Southern states rank highest

• Higher delinquency rates in these states are linked to factors such as lower average incomes, more limited labor‑market opportunities, and heavier reliance on borrowing relative to earnings.​

• Survey data also show that nationally, many borrowers report difficulty affording payments and basic needs, but these pressures can be more acute in lower‑income regions, amplifying delinquency risk.​