Financial strains are pushing more Americans into delinquency, according to a report from TransUnion, with student loan borrowers in particularly dire straits following the end of the federal loan forgiveness program.
In a recent analysis, the consumer credit reporting agency found that student loan delinquencies among rental applicants doubled in early 2025, with the share of those 90 or more days past due climbing from 15 percent in January to 32 percent in May.
“Consumers across all tiers experienced notable score declines,” TransUnion wrote in its report, noting that more than 2.2 million borrowers saw their scores fall by over 100 points in a matter of months.
Why It Matters
As TransUnion writes, the end of pandemic-era student loan forgiveness has forced millions to make payments for the first time in years, creating a crisis for many of the country’s borrowers that is now “reshaping the rental market and creating new challenges for property managers who rely on credit-based scoring to assess risk.”
And beyond student loans, the country is seeing a surge in delinquencies and defaults across almost every type of credit—a spike experts consider highly irregular and a warning signal for lenders and the broader economy.
What To Know
In its report, TransUnion noted that one in three borrowers are now 90 or more days past due, and that one in five have stopped making payments altogether.
According to a report from the Education Data Initiative in August, around 42.5 million student borrowers hold federal loan debt, with a total outstanding balance of nearly $1.7 trillion.
Prior to resuming collections on defaulted payments in May, the Department of Education estimated that more than 5 million borrowers had not made a monthly payment in over a year—placing them in default—and that 4 million were in late-stage delinquency.
TransUnion’s report found that many have now slipped into the higher-risk lending categories as a result of the resumption, with credit score shifts affecting renters across each category, writing: “Even consumers who previously maintained high scores aren’t immune to the ripple effects of student loan stress.”
Among Super Prime borrowers—those with scores of between 781 and 850—51 percent dropped to Prime (661-720) and 45 percent to Near Prime (601-660). Some 34 percent of Prime Plus borrowers (721-780) dropped to Prime and 58 percent to Near Prime.
Among the Prime group, 59 percent fell to Near Prime and 23 percent into the risky, Sub Prime category for those with scores of 600 or under, as did 63 percent of Near Prime borrowers.
What People Are Saying
TransUnion, in its “Trapped by Tuition” report, wrote: “These shifts mean [a property manager’s] applicant pool is changing fast. Renters who looked financially solid six months ago may now trigger alarms in your screening system.”
Maitri Johnson, executive vice president of TransUnion’s tenant and employment screening business, said: “The influx of applicants struggling with student loan payments could significantly impact property managers. Applicants who once met screening thresholds are now falling short.”
What Happens Next
TransUnion warned that the heightened financial stresses now gripping millions could increase the prevalence of fraud, writing that “renters under pressure may falsify documents or misrepresent income.”
“Student loan stress is reshaping the rental landscape, and traditional screening methods simply can’t keep up,” Johnson said. “With delinquencies doubling and credit tiers slipping, property managers must evolve their strategies.”
