Almost 10 Million Student Debtors Risk Credit Hit, NY Fed Says

Almost 10 million student-loan borrowers face a hit to their credit scores as pandemic-era measures to limit the consequences of non-payment fade from the picture, according to research by the Federal Reserve Bank of New York.

Policies enacted after Covid hit, including a freeze on payments and interest and a moratorium on classifying debt as delinquent, have “upended most trends underlying student loans” in the US, researchers at the New York Fed’s Research and Statistics Group wrote in a blog Wednesday. As things normalize, there’s likely to be “a significant uptick in the delinquency rate for student loans.”