Why Black Student Borrowers Face Greater Issues in Loan Repayment

Over 2.2 million delinquent student loan borrowers have witnessed a staggering drop in their credit scores, by 100 points or more, following the resumption of reporting by loan servicers to credit bureaus earlier this year.The cessation of pandemic relief measures threatens to further limit affordable credit alternatives for federal student loan borrowers already grappling with escalating prices and stagnant incomes, making new credit increasingly costly, if available at all. Borrowers will often find themselves more vulnerable to predatory lenders who exploit their financial hardships with harmful debt schemes, exacerbating their financial strife.The New York Federal Reserve reported the highest delinquency rates in five years in early 2025, with one in ten borrowers being 90 days or more delinquent. Notably, many newly delinquent borrowers had previously maintained scores sufficient for securing autos, mortgages, and credit cards.Consumer advocates emphasize the profound impact rising delinquencies may have on financial stability and economic activity.