Most federal student loan borrowers have been required to make monthly payments since those payments resumed in October 2023, following the nearly four-year pandemic pause. But borrowers who couldn't or didn't over that period were still shielded from some of the potential consequences, like having their delinquency reported to credit bureaus or defaulted loans sent to collections. 

That grace period has come to an end. Loan servicers began reporting delinquent accounts to credit bureaus in January 2025 and wage garnishments for borrowers who are more than 270 days late on payments are expected to resume soon.

For borrowers who weren't aware or couldn't make payments, it's been a shock to the system. 

"Trying not to crash out witnessing my credit drop almost 150 points because of student debt," Kayla Quinones, a 26-year-old borrower who lives in Florida posted on TikTok in March. 

Quinones didn't realize she had payments due on the loan she took out to attend college. She earned her associate degree in 2020 and was not required to make a payment on her federal loan until February 2023, according to documents reviewed by CNBC Make It.

She received emails from the Department of Education but thought they were more general announcements, not calls to action for her to start paying, she says.

While thinking about moving to another part of Florida, she checked her credit score at the beginning of March only to find out it had dropped 137 points since January. It dropped another 16 points by the end of March.

She's not alone. Borrowers throughout the country have reported massive credit score drops as loan servicers resumed reporting delinquent accounts to the credit bureaus. Nearly 14% of borrowers had at least one loan 90 days past due in the first quarter of 2025, according to a New York Federal Reserve report.

'I wasn't really sure who I was supposed to pay back'

Seeing her credit score drop so dramatically "was what threw me into action," Quinones says. "I was like, 'Oh, my God.' I went back into [my loan servicer] website, took a peek, and was just kind of figuring out what is going on."

The risk that her missed student loan payments could jeopardize her ability to get approved for a new apartment made Quinones even more intent on getting back in good standing. She had some savings that she used to pay the overdue sum on her loan to bring it up to date, and she worked with her servicer to get on a payment plan to help prevent something similar from happening in the future.

From a financial standpoint, she could have avoided the whole ordeal by making monthly on-time payments. But a lack of understanding of the student loan repayment process had her missing communications from her loan servicer telling her to enroll in a repayment plan.

"I was kind of unsure as to how that [student loan] process went," she says. "It could have been a bit of naiveness [sic], but I wasn't really sure who I was supposed to pay back. I just feel like I would receive emails from the Department of Education like, 'Hey, make sure your payment plans are all set up.'"

'I was just worried about living'

Some borrowers simply felt unable to keep up, due to financial circumstances.

Mervelline Aflata, a 29-year-old borrower who lives in Dallas, started making payments on her federal loans soon after she first finished her undergraduate schooling in 2017, but stopped when the pandemic-era pause on payments made them optional. She started grad school during that time, so she received another grace period on her loans after she earned her Master's in May 2023.

Aflata had surgery at the beginning of 2024 and planned to resume paying her loans later that year. But right as she was preparing to restart the process, she lost her job.

"I was no longer in the right position to start paying back my loans," she says.

She got a new job within three months and started in January 2025. But as she looked to start paying again in March, her account had been marked delinquent, and her credit score dropped by 154 points. Though she was in a tough financial position, she acknowledges she could have tried working with her servicer to avoid the negative credit impact.

"I could have called in to see if there's anything that I could have done," Aflata says. "Maybe I could have looked into more options with the loan servicer, but in that moment, I was just worried about living."

She started researching her options to get her account back in good standing and bring her credit score back up and was dismayed by what she found online.

"Everything was basically telling me that, like, you've got to wait it out. Maybe in two or three years your score would come back," she says. "[But] no, I don't have two or three years to wait for my score to come back."

Aflata turned to ChatGPT to find some answers. The AI assistant recommended she get a letter from her loan servicer to file a dispute with the credit bureaus. She reached out to her servicer and asked to pay the upcoming balance and for a goodwill removal of the delinquency from her record.

If you are normally on time with your payments or had a situation like Aflata where other circumstances prevented you from making payments, you can make a "goodwill request" with your servicer to remove the missed payment from your credit report. This process is not guaranteed, though.

In Aflata's case, her servicer was unable to remove or prevent the missed payments from going on her credit report. But the servicer agreed to bring her account current and send her a letter stating that she was in good standing. From there, she was able to dispute the missed payments through TransUnion and attest that her account was not currently delinquent. 

Within a week, the missed payments were removed from Aflata's credit report and her score came back up. She's looking to buy a home in the near future, so credit is critical.

"I knew that having [the missed payments] on my record was going to be a bad look," she says. "That's why I was kind of panicking and like, if that's on my record, there's no way I'm going to be approved for a loan."

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