In March 2020, the federal government enacted a “temporary” pause on student loan repayment, which the Trump and Biden administrations extended a grand total of eight times. But as of October 2024, loan repayment has officially resumed—meaning borrowers who miss payments will face consequences such as negative credit reports.

As of September 2024—the latest month for which the Education Department has reported data—just 13 million borrowers were in current repayment on their loans, out of roughly 35 million with federally-managed student loans who were not enrolled in school. More than seven million borrowers were at least 30 days delinquent on their loans, with another six million in default (all borrowers who had been in default before the pause began, and remained in that status throughout). Nine million borrowers were in forbearance on their loans, meaning the federal government was allowing them to avoid making payments.

More than half of borrowers were not making payments as of September, many of whom have likely not made a payment since 2020, if ever. Some borrowers are not aware that payments have resumed; others may be bitter at the Biden administration unsuccessfully (and illegally) promising them forgiveness.

Another problem is the turnover in loan servicers, the private companies which the Education Department contracts with to manage loan payments. Several loan servicers have ended their contracts with the government, meaning their accounts have been transferred to new servicers. This means that many borrowers are receiving communication from a new and unfamiliar company. The following chart shows the distribution of student loan servicers before the payment pause versus last September.

Since September, the Education Department has reported student loan delinquencies to credit bureaus, which has impacted borrowers’ credit scores. According to data from Credit Karma, borrowers who formerly had the highest credit scores have seen the largest hits to their credit. Delinquent student loan borrowers who had credit scores exceeding 720 saw an average 137-point drop in their scores, compared to a 71-point drop for borrowers who had a credit score below 600.

A further complication is an injunction from the Eighth Circuit Court of Appeals, which implied that student loan repayment plans offered using a certain legal authority (the “income-contingent repayment” or ICR authority) may be unlawful. If the courts end up ruling along similar lines, more than 10 million borrowers could be required to switch into a different repayment plan, further complicating the administration of the return to repayment.

High rates of student loan delinquency, servicer turnover, falling credit scores, and sweeping court rulings have made the return to student loan repayment a monumental challenge for the new Trump administration to confront. Officials should do their best to spread the message that payments are due again and ensure that borrowers are aware of the options available to repay.