As Federal Collections Activity Resumes, More Than One in Five Federal Student Loan Borrowers With a Payment Due are Seriously Delinquent

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TransUnion's analysis reveals a concerning surge in federal student loan delinquencies, with 20.5% of borrowers with payments due being 90+ days delinquent as of February 2025, up from 11.5% in February 2020. The analysis shows subprime borrowers are most affected, with 50.8% being seriously delinquent. Default has severe credit score implications, with borrowers experiencing an average 63-point credit score decline. Super prime borrowers face the harshest impact, with defaults causing an average 175-point drop in credit scores. Notably, 23% of borrowers who defaulted in early 2025 were previously in prime and above risk tiers, highlighting the widespread impact across credit segments as federal collections activity resumes.

Positive

• TransUnion's comprehensive analysis provides valuable insights for lenders and borrowers
• The company offers TruVision Premium Student Loan Attributes to help lenders assess portfolio risks

Negative

• Record-high delinquency rate of 20.5% among federal student loan borrowers
• 50.8% of subprime borrowers are seriously delinquent, up from 38.8% in 2020
• Significant credit score impacts across all tiers, with super prime borrowers facing 175-point drops
• 23% of recent defaults came from prime and above risk tiers, indicating widespread financial stress

New TransUnion analysis explores the percentage of student loan borrowers at risk of default and the credit score impacts

CHICAGO, May 05, 2025 (GLOBE NEWSWIRE) -- As the U.S. Department of Education begins resuming collections activities among defaulted borrowers, new research reveals that the number of consumers at risk for default has soared past pre-pandemic levels. These findings come from a new analysis conducted by TransUnion (NYSE: TRU) and featured at the company’s 2025 Financial Services Summit, attended by 300+ leading industry executives.

The Department of Education (DOE) initially suspended federal student loan payments in March 2020. The agency called for payments to resume in September 2023, with servicers directed not to report them to credit bureaus until October 2024, with the requirement that borrowers only be reported to credit bureaus as delinquent when they reach 90 days or more past due on federal student loan accounts. Last month, the DOE announced it would resume collection activities effective today.

The analysis found that 20.5% of federal student loan borrowers with a payment due are 90 days or more past due (90+ DPD) as reported by their servicer through February 2025. This compares to 11.5% in February 2020, near the beginning of the pandemic and the subsequent student loan pause. The current rate of delinquency represents the highest figure ever recorded.

More Consumers are 90+ Days Past Due (90+ DPD) Than Just Prior to the Pandemic

	February 2020	February 2025
Total	11.5%	20.5%

Source: TransUnion U.S. Consumer Credit Database

"Student loans and their payment reporting are complex. More than one in five federal student loan borrowers with a payment due have been reported as seriously delinquent, but this figure may in fact be much higher," said Michele Raneri, vice president and head of research at TransUnion. "The complexity arises in part from the various reasons borrowers might not be making payments without being considered delinquent, such as being a current student or in deferment or forbearance. We are continuing to analyze data to determine how many non-payers are at risk of being reported as seriously delinquent or default."

Across risk tiers, subprime saw the highest percentage of payment-due student loan borrowers seriously delinquent in February 2025, with 51% at 90+ DPD, up from 39% in February 2020. Near prime followed at 23% in February 2025 (up from 9% in February 2020).

More Than Half of Subprime Federal Student Loan Borrowers With a Payment Due Were 90+ DPD

	February 2020	February 2025
Super prime	0.1%	0.9%
Prime plus	0.1%	2.1%
Prime	1.3%	7.5%
Near prime	9.1%	23.3%
Subprime	38.8%	50.8%

Source: TransUnion U.S. Consumer Credit Database

The analysis also found that those consumers who had faced default since the end of the on-ramp saw their credit scores decline by an average of 63 points. And while a lower percentage of super prime borrowers were seriously delinquent, those who did ultimately default saw the impact on their credit scores to be significantly greater than that of traditionally more risky credit tiers. This is largely due to the fact that borrowers in higher credit risk tiers typically have fewer derogatory marks, so an account in default has the potential to have a significant and jarring impact.

Among those borrowers who experienced a default in the months of January and February 2025, 23% were in prime and above risk tiers in December 2024.

Consumers in the Super Prime Credit Tier Were the Most Impacted by Student Loan Default

Risk Tier Prior to Default	Average Credit Score* Change
Super prime	-175 pts
Prime plus	-121 pts
Prime	-99 pts
Near prime	-64 pts
Subprime	-42 pts

*VantageScore® 4.0

"Consumers may find themselves shocked by the dramatic and immediate impact that a default can have on their credit scores. Likewise, lenders need to recognize the significant potential impact on otherwise low-risk borrowers," said Joshua Trumbull, senior vice president and head of consumer lending at TransUnion. “That need to identify potentially impacted consumers and the associated risk is creating a surge in lenders incorporating student loan-specific insights into portfolio reviews and doing those reviews more often.”

To gain additional insights into how student loans are impacting the wallets of their potential customers, lenders can leverage TruVision Premium Student Loan Attributes to see details about student loan types, balances, and payment histories to help identify impacted consumers. Consumers seeking more information about how student loans affect credit can read our consumer blog on the topic.

About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good^® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world. http://www.transunion.com/business

Contact	Dave Blumberg
	TransUnion
E-mail	david.blumberg@transunion.com
Telephone	312-972-6646

FAQ

What is the current delinquency rate for federal student loan borrowers in 2025?

As of February 2025, 20.5% of federal student loan borrowers with a payment due are 90+ days delinquent, up from 11.5% in February 2020.

How much does defaulting on student loans affect your credit score according to TransUnion (TRU)?

According to TransUnion's analysis, defaulting on student loans causes an average 63-point credit score decline, with super prime borrowers facing the largest impact of 175 points.

What percentage of subprime borrowers are delinquent on federal student loans in 2025?

50.8% of subprime federal student loan borrowers with a payment due were 90+ days delinquent in February 2025, up from 38.8% in February 2020.

How many prime and above borrowers defaulted on student loans in early 2025?

23% of borrowers who defaulted in January and February 2025 were previously in prime and above risk tiers in December 2024.

When did federal student loan collections resume?

The Department of Education resumed collection activities on May 5, 2025, after initially suspending federal student loan payments in March 2020.