Student loan delinquency is increasing most in these states, study finds

Student loan delinquency rate spikes post pandemic

Nearly one in three student loan borrowers are at risk of defaulting on payments as early as July. This comes as delinquency and default rates soar in the wake of pandemic-era repayment relief ending. This accounts for about 5.8 million federal student loan borrowers, who were 90 days or more past due on their payments as of April 2025. This new information comes from analysis from TransUnion. LiveNOW?s Andrew Craft is getting the latest from Fox News multimedia reporter, Caroline Elliott.

Millions of student loan borrowers are struggling to stay current on payments since they resumed following the COVID-19 pause, which could lead to detrimental impacts like lowered credit scores and even garnished wages, a new WalletHub analysis found. 

WalletHub says it used proprietary data to compare student loan delinquency rates in the last quarter of 2024 with delinquency rates in the first quarter of 2025. 

Here’s what they found:

States with biggest increase in delinquency rates

1. Missouri – delinquencies up 59.6%
2. Hawaii – delinquencies up 53.77%
3. Vermont – delinquencies up 52.90%
4. West Virginia – delinquencies up 47.92%
5. Arizona – delinquencies up 45.45%
6. Michigan – delinquencies up 42.83%
7. New Mexico – delinquencies up 42.62%
8. Massachusetts – delinquencies up 39.24%
9. Arkansas – delinquencies up 38.25%
10. Kansas – delinquencies up 34.13%

States with lowest increase in delinquency rates

1. Alaska – delinquencies down 61.16%
2. Delaware – delinquencies down 35.21%
3. Rhode Island – delinquencies down 28.07%
4. Nebraska – delinquencies down 24.07%
5. Nevada – delinquencies down 23.68%
6. Wyoming – delinquencies down 22.88%
7. Florida – delinquencies down 20.85%
8. Minnesota – delinquencies down 13.42%
9. Louisiana – delinquencies down 10.53%
10. Oregon – delinquencies down 10.45%

Changes to student loan repayments

The backstory:

Student loan payment delinquencies began appearing on credit reports for the first time in 43 months this year – and it’s having a significant impact on credit scores for millions of borrowers. Student loan collections and payments were paused for more than three years because of the COVID-19 pandemic. 

RELATED: Why student loan delinquencies are soaring - and credit scores are dropping

The U.S. Department of Education and the U.S. Treasury began collections for defaulted loans in May, actions that could include garnished wages, tax returns and Social Security payments.

Dig deeper:

Earlier this month, the Department of Education suspended student loan forgiveness under the Income-Based Repayment plan (IBR), which offers an affordable option for borrowers to repay their loans.

Millions of student loan borrowers are struggling with payments, a new study finds (Photo by Selcuk Acar/Anadolu via Getty Images)

The IBR plan cancels any remaining loan debt after 300 monthly payments, or about 25 years. It’s one of four income-driven repayment plans available for federal student loan borrowers. 

The department said it has "temporarily paused discharges for IBR borrowers in order to comply with ongoing court injunctions." According to Forbes, IBR is the only repayment plan not under legal challenge or court injunction. 

The education department has stopped discharging borrowers who meet the 300-payment threshold, but a spokesperson told ABC News that anyone who makes payments after their loans should have been discharged will be refunded when discharges resume. 

How late student loan payments can hurt you 

Why you should care:

"Being delinquent on student loans has the potential to ruin your finances and your credit score," WalletHub editor John Kiernan says being delinquent on student loans can potentially ruin your credit score and finances.  

What you can do:

Kiernan says federal student loans are reported to credit bureaus after 90 days of missed payments, while private loans can report delinquencies as soon as 30 days. 

"If you’re having trouble paying, it’s important to contact your lender as soon as possible to try to work out a solution," Kiernan says.