A growing number of U.S. student loan borrowers are falling behind on their payments, and it’s not just those with poor credit. According to a recent report by credit bureau TransUnion, even borrowers with prime credit scores—typically considered financially stable—are missing payments at unprecedented rates.
The data shows that 20.5% of student loans are at least 90 days past due as of early 2025. That’s the highest delinquency rate in recent memory and a sign of deepening financial strain across borrower groups.
Credit Score No Longer a Shield
TransUnion’s report, first shared with MarketWatch, highlights a concerning shift: the share of delinquent student loans held by borrowers with prime credit scores jumped from 33% in the fourth quarter of 2023 to 46% in the first quarter of 2025. Prime credit scores typically range between 661 and 780.
This increase suggests that even households traditionally seen as “low risk” are struggling with student loan payments. That’s unusual in lending trends, where delinquency is generally concentrated among those with lower credit scores.
“The narrative that only low-income borrowers are at risk doesn’t hold anymore,” said Michele Raneri, vice president of U.S. research and consulting at TransUnion. “We’re seeing financially healthy borrowers showing signs of stress.”
Context: The End of COVID-Era Relief
One key reason for the spike is the resumption of student loan payments after the pandemic-era pause. Monthly payments restarted in October 2023, and the Department of Education resumed collections on defaulted loans in May 2025.
During the three-year pause, borrowers were not required to make payments, and no interest accrued. That temporary relief allowed millions to stabilize other financial priorities. But the return of required payments has triggered financial pressure, especially with inflation still affecting household budgets.
Lending Industry on Alert
Lenders are watching this trend closely. If delinquency among prime borrowers continues to rise, it could signal broader economic stress or weaknesses in the current student loan system.
“Student loan performance is typically seen as a canary in the coal mine,” said Charlie Wise, TransUnion’s head of global research. “When we see prime borrowers faltering, it tells us that the economic pressures are more widespread than they may appear.”
Limited Access to Repayment Support
Despite federal efforts to promote income-driven repayment (IDR) plans and other safety nets, many borrowers are still unaware of or unable to access these programs. A backlog of more than 1.8 million IDR applications has delayed support for those seeking lower monthly payments, according to the Department of Education.
In some cases, loan servicers have been slow to respond, leading borrowers to fall behind before getting help.
What Borrowers Can Do
Borrowers facing difficulties are encouraged to contact their loan servicer immediately. The Department of Education also recommends visiting StudentAid.gov to review repayment options and explore programs like SAVE (Saving on a Valuable Education), which can lower or pause monthly payments based on income.
For those in default, the Department’s Default Resolution Group offers options like rehabilitation or consolidation to restore loans to good standing and avoid collections.
