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Credit Scores Plunge in D.C. as Student Loan Delinquencies Surge 

June 10, 2025

In early 2025, credit scores for millions of Americans dramatically declined following the end of federal student loan payment pauses and the expiration of the Education Department's "on-ramp" period in late 2024. According to the Federal Reserve Bank of New York, nearly six million student loan borrowers nationwide were at least 90 days delinquent between January and March, with over 2. 2 million borrowers experiencing credit score drops exceeding 100 points.

Who is affected

  • Nearly six million student loan borrowers nationwide who are at least 90 days delinquent
  • Over 2.2 million borrowers who saw credit score drops exceeding 100 points
  • More than 1 million borrowers who lost at least 150 points on their credit scores
  • Washington D.C. residents, who have the highest average debt per capita ($166,186) and student loan debt per borrower ($54,145)
  • Previously good-credit borrowers, with those having scores above 720 seeing average drops of 177 points
  • Borrowers who fell below the 620 threshold for conventional mortgages

What action is being taken

  • Credit bureaus are now reporting missed student loan payments
  • Total household debt is climbing, reaching $18.2 trillion
  • Housing debt including mortgages and home equity lines of credit continues to rise
  • D.C. borrowers are navigating a volatile housing market amid soaring debt

Why it matters

  • Severe credit score declines have upended access to affordable loans, housing, and basic necessities
  • Borrowers with damaged credit face significantly higher interest rates
  • Lower credit scores can result in substantially higher costs (an estimated additional $60,000 in interest over a 30-year, $300,000 mortgage)
  • Credit rebuilding is a slow process, with negative marks staying on credit reports for up to seven years
  • The impact compounds existing financial stress from rising costs and stagnant wages
  • D.C. residents face particular challenges due to their high debt levels and the city's high cost of living

What's next

  • No explicit next steps stated in the article

Read full article from source: The Washington Informer