Recent data show U.S. credit scores have fallen at the fastest rate since the 2008 financial crisis. Much of the decline is tied to rising student loan delinquency as pandemic-era relief ends. If you have federal student debt, now more than ever it’s crucial to understand how this could affect your credit, and what options a lawyer for student loans or student loan advisor can help you pursue.
What the latest reporting reveals
- According to a FICO report, the average national credit score dropped from 717 to 715 between April 2024 and April 2025 — the sharpest one-year decline in credit scores since the Great Recession.
- One major driver: increased student loan delinquencies after the end of the COVID-era forbearance period and the expiration of the “on-ramp” that delayed negative credit reporting. Once missed payments began being reported, many borrowers saw serious consequences.
- Among borrowers with student loans, more than 10 percent have become more than 90 days delinquent. This has severely hurt credit for many. For example, an estimated 6.1 million consumers had student loan delinquencies reported in a recent period, and many of them saw steep drops in credit scores.
- Gen Z is especially impacted. Their average credit score dropped more than other age groups, in part because of higher student loan burdens, fewer savings buffers, and less of a margin for economic shocks.
How student loans contribute to credit score drops
Student loans can affect credit scores in several interrelated ways:
- Negative reporting of missed or late payments
When payments are 30, 60, or 90+ days past due, or in default, borrowers may see these marks on their credit reports. Those marks heavily influence the “payment history” component of credit scoring systems, which often has the single largest weight. Even one serious delinquency can drop a credit score substantially. - Resumption of interest, collections, and credits reporting
During forbearance and on-ramp periods, some missed payments were shielded from credit reporting. Once that protection ended (late 2023 into 2024), delinquencies began appearing again. The return of collections activity, wage garnishments, and default for some loans magnifies the impact. - Balance size and utilization pressure
Large loan balances (which many student loan borrowers carry) can compound stress. When borrowers have multiple debts, higher interest rates, rising living costs, they may delay or miss payments elsewhere — which also contributes to credit score decline. While student loans themselves are an installment debt (which is treated differently than revolving debt like credit cards), default or serious delinquency on them still affects overall credit health. - Cascading effects of delinquency
Once a student loan is significantly delinquent or in default, the consequences are not only credit score decline: collection actions (which themselves may be reported), additional fees, potential garnishment of wages, and loss of eligibility for relief programs. These all tend to reinforce financial instability.
Why this matters beyond just a number
Credit scores do more than shape your ability to borrow. When scores fall:
- Interest rates on new loans (auto, mortgage, credit cards) are higher.
- Some landlords, insurers, or employers may view credit history (or credit scores) in evaluating applications.
- Access to housing, utilities, or other services may become more difficult or more costly.
- Missed opportunities for favorable financial products mean added cost over time.
For someone with federal student debt, these effects stack: higher debt payments + worsened credit access + higher borrowing costs = a steeper road to financial stability.
What borrowers should do now
As your student loan advisor and lawyer for student loans, Kaplan Law Firm recommends these steps:
- Check your credit reports and scores
Immediately get your full credit reports from the major bureaus. Look for student loan accounts that are reported as delinquent, in default, or missing payment history. - Determine your delinquencies and whether they’re valid
Some delinquencies may result from misunderstandings, miscommunication from servicers, delays in reporting, or other administrative errors. We can help audit your student loan account to see what is accurate and what might be challenged. - Explore repayment or rehabilitation options
If your student loans are past due, there may be federal programs or policies that allow for rehabilitation, income-driven repayment, or other ways to bring loans back into good standing. Taking action sooner can limit credit damage. - Avoid letting delinquencies linger
Once a delinquency hits your credit report, it remains for up to seven years — even if you resolve the debt. Paying off or getting current as quickly as possible helps. Keep up with all other debts and credit obligations to avoid additional negative marks. - Get legal and expert help when needed
If you’re unsure of your rights, confused by servicing errors, or facing collections or default, a student loan consultation with Kaplan Law Firm can help. As your lawyer for student loans, we can advocate for you, help correct your credit record, and ensure your path toward federal education loan forgiveness remains on track if you qualify.
How Kaplan Law Firm Can Support You
Here’s how we work with borrowers hit by credit score damage due to student loans:
- Perform a comprehensive review of your student loan and credit report history.
- Identify whether negative marks are properly reported and whether errors exist.
- Help you negotiate with your loan servicer or collection agency to correct errors or enroll in suitable repayment plans.
- Map out eligibility for forgiveness or discharge programs.
- Advise you on how to rebuild credit — protecting what you can while minimizing further damage.
If you or a loved one have seen your credit score drop, or you’re worried that your student loan behavior (or non-response by a servicer) could cause more harm, reach out for a student loan consultation. A few informed steps can make a big difference in holding your credit steady and preparing for brighter financial opportunities. Contact Kaplan Law Firm to see how we can help.
