Why are student loan borrowers falling behind on payments?

Delinquencies surge as the Trump administration upends the program

Illustration of a mortar board with a ball and chain representing debt
Roughly 9 million Americans have missed or late payments
(Image credit: Illustration by Stephen Kelly / Getty Images)

Student loans are coming due, but they are not necessarily getting paid. Missed and late payments are surging to record levels right as the Trump administration attempts to dismantle the agency that oversees the loans.

A "record share" of student loan debt is delinquent, said Axios. Nearly a quarter of borrowers — roughly 9 million Americans — are behind on their payments, a development that threatens to hurt the credit scores of young borrowers. The growing number of delinquencies is a sign there is "more stress on American consumers than previously known." The eventual result could be "reduced credit limits, higher interest rates for new loans and overall lower credit access" for a generation of college graduates, said New York Fed research economists Daniel Mangrum and Crystal Wang.

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Joel Mathis, The Week US

Joel Mathis is a writer with 30 years of newspaper and online journalism experience. His work also regularly appears in National Geographic and The Kansas City Star. His awards include best online commentary at the Online News Association and (twice) at the City and Regional Magazine Association.