According to a new measure from the Federal Reserve Bank of New York, about 9.7 million student loan borrowers incurred late payments after the COVID-19 pandemic-era repayment pause ended.
The volume of past due federal loans quickly returned to pre-pandemic levels and reached a new high of 15.6 percent by the end of the on-ramp period, with more than$ 250 billion in delinquent debt held by 9.7 million borrowers, according to the report.
The Biden administration introduced a 12-month “on-ramp” to assist borrowers move up to payments when the COVID-19-era wait on federal student loan payment ended in September 2023. Lenders were shielded from the majority of penalties for late payments during this time, but this reduction ended on September 30, 2024.
TRUMP’S SECOND TERM MAY NOT APPLY TO BIDEN’S STUDENT LOAN FORGIVENESS.
According to the Fed’s report,” It is fair to anticipate student loan crime to beat pre-pandemic levels when new delinquencies hit funds reports.”
A lender’s credit rating may decline by over 150 points as a result of “reduced funds limits, higher interest rates for new loans, and ultimately lower funds access.”
