Analysis of Federal Student Loan Delinquency Rates Following Payment Resumption
September 2025 | Based on NY Federal Reserve Data
Student loan delinquency is a growing crisis in 2025, and the need for borrowers to understand how repayment programs work has never been greater.
Following the end of pandemic-era forbearance and the expiration of the "on-ramp" period in October 2024, student loan delinquencies have surged dramatically. Nearly 1 in 4 borrowers required to make payments are now delinquent, with 10.2% of total student debt now 90+ days past due as of Q2 2025—up from less than 1% just six months earlier. This unprecedented acceleration signals a system in crisis, affecting 5.3 million borrowers in default and another 4 million in late-stage delinquency.
This distinction is crucial: While 13.7% of all student loan borrowers are delinquent, the true crisis is revealed when examining only those required to make payments. Among borrowers actually in repayment (excluding those in school, deferment, or forbearance), nearly 1 in 4 are behind on their payments - a staggering 23.7% delinquency rate that far exceeds pre-pandemic levels.
Federal Reserve Bank of New York, Quarterly Report on Household Debt and Credit
| Period | Delinquency Rate (90+ Days) | Quarter-over-Quarter Change | Key Events |
|---|---|---|---|
| Q2 2024 | 0.8% | - | On-ramp period active |
| Q3 2024 | <1% | Minimal | On-ramp period active |
| Q4 2024 | <1% | Minimal | On-ramp expires October 2024 |
| Q1 2025 | 7.74% | +6.94pp | Delinquencies reported to credit bureaus |
| Q2 2025 | 10.2% | +2.46pp | Collections resumed in May 2025 |
The chart above illustrates the stark difference between overall delinquency rates and rates among those actually required to make payments. This gap highlights how many borrowers are shielded from delinquency through various forbearance and deferment programs, masking the true severity of the repayment crisis.
Student loan delinquencies now far exceed those of other major debt types. At 10.2%, student loan delinquency rates are nearly double credit card rates (5.4%) and more than 11 times higher than mortgage delinquency rates (0.9%). This comparison underscores the unique severity of the student loan crisis.
Based on current transition rates, the NY Fed projects that delinquencies could return to or exceed pre-pandemic levels of 11-12% by the end of 2025. With approximately 31% of borrowers with payments due already 90+ days past due according to TransUnion data, the situation may be even more severe than official statistics indicate.
Regional disparities are significant, with Southern states experiencing the highest delinquency rates. Mississippi leads with 44.6% of borrowers in repayment being delinquent, while states like Massachusetts and Connecticut have rates below 15%.
