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Get the Facts: More student loans are falling into delinquency. Here’s why
Delinquency on student loans rose sharply after federal protections ended, with nearly 20% of loans held by borrowers aged 50+ now 90+ days overdue, Federal Reserve data shows.
- This year, Federal Reserve Bank of New York data show student loans entering serious delinquency rose as the protection that expired at the beginning of this year led to late payments on credit reports.
- Repayments resumed with a one-year "on-ramp" that delayed reporting before rising delinquencies as student loan debt hit $1.64 trillion within $18.59 trillion total household debt.
- Americans aged 50 and older experienced a rise in overdue loans from 11% to nearly 20%, holding $416.7 billion in debt, while Americans aged 40 to 49 had about 15%.
- Serious delinquency refers to payments 90 or more days overdue, and if borrowers fall into default, collections may include wage garnishment or tax refund seizure as government collections resume soon.
- As the government resumes collection on millions of default student loans, experts warn scammers could target borrowers, and the Department of Education says you should never pay third-party companies that charge fees.
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