Core Insights - A significant number of federal student loan borrowers are facing potential involuntary collections, such as wage garnishment and withholding of tax refunds, due to high delinquency rates [1][5][7] - Borrowers are prioritizing mortgage and auto loan payments over student loans, but in the face of involuntary collections, they are more likely to prioritize student loan payments over credit cards and personal loans [2][3] Delinquency Trends - Serious delinquency rates for federal student loan borrowers have shown a concerning trend, with a notable increase in delinquencies across various credit products from December 2024 to June 2025 [3][4] - The serious delinquency rates for different credit products as of June 2025 are as follows: Mortgage at 5.59%, Auto at 6.30%, Personal Loans at 9.50%, and Credit Cards at 5.96% [4] Borrower Behavior - Nearly half of the federal student loan borrowers who are missing payments cite affordability concerns, while one-third are prioritizing other bills over student loan repayments [5] - As of July 2025, 29.0% of federal student loan borrowers in repayment, equating to 5.4 million individuals, were reported to be 90 or more days past due, indicating a persistent issue with delinquency [6] Future Implications - The ongoing high levels of serious delinquency among federal student loan borrowers may lead to a shift in payment hierarchy, where student loans could take precedence over other debts once involuntary collections begin [7] - Lenders are encouraged to utilize tools like TruVision Premium Student Loan Attributes to better understand the risks associated with federal student loan borrowers in their portfolios [8]

Core Insights - TransUnion's analysis indicates a record number of federal student loan borrowers are 90 or more days past due, with many at risk of defaulting soon [1][6] Delinquency Rates - As of April 2025, 31.0% of federal student loan borrowers are 90+ days past due, a significant increase from 20.5% in February 2025 and nearly triple the 11.7% rate in February 2020 [2][4] - The April 2025 delinquency rate is the highest recorded, showing only a modest increase from March 2025's 30.6% [3][5] Borrower Impact - Approximately 5.8 million federal student loan borrowers are reported as 90+ days past due, with only 0.3% currently in default [6] - An estimated 1.8 million of these borrowers could reach default status by July 2025, with an additional one million in August and two million in September [7] Credit Score Effects - Newly delinquent borrowers have experienced an average credit score drop of 60 points, with many shifting down at least one risk tier [2][8] - More than 20% of borrowers reported as 90+ DPD were in prime or above credit risk tiers before delinquency, but fewer than 2% remain in those tiers afterward [8][9] Recommendations for Borrowers - Borrowers at risk of default are encouraged to contact their loan servicers to explore options such as income-driven repayment plans or loan rehabilitation programs [8]

New TransUnion analysis explores the percentage of student loan borrowers at risk of default and the credit score impactsCHICAGO, May 05, 2025 (GLOBE NEWSWIRE) -- As the U.S. Department of Education begins resuming collections activities among defaulted borrowers, new research reveals that the number of consumers at risk for default has soared past pre-pandemic levels. These findings come from a new analysis conducted by TransUnion (NYSE: TRU) and featured at the company’s 2025 Financial Services Summit, at ...