Do student loans affect your credit score?

Student loans count like any other loan

A student loan sits on your credit report next to your cards and your car loan, and the same rules score it. Payment history is 35% of a FICO Score, so years of on-time student loan payments are among the best things a young file can show, and a run of missed ones is among the worst. The balance counts too, under amounts owed, but the part you control month to month is whether each payment arrives.

During an approved in-school status, deferment or forbearance that suspends required payments, a newly missed payment is not due. Earlier delinquencies can remain on the report; confirm the effective dates and status with your servicer. The New York Fed counted more than twenty million federal borrowers in that position in early 2025. Those loans still appear on the report; they just do not generate late marks.

Federal loans also come with a cushion that private debt usually does not. Federal Student Aid says a loan is delinquent the first day after a missed payment, but the servicer reports the delinquency to the national credit bureaus only once it is 90 days or more past due. That cushion is federal practice. A private student loan follows its own lender's reporting, so do not assume the same grace.

Why so many scores fell in 2025

For five years, federal student loans mostly could not hurt anyone's credit. Payments were paused for 43 months, from March 2020 through September 2023. After they restarted, a one-year on-ramp kept missed payments off credit reports. That on-ramp expired in October 2024, and delinquencies began appearing on credit reports in the first quarter of 2025.

The effect was immediate. The New York Fed found the share of student loan balances seriously past due jumped from below 1% to nearly 8% in that quarter. More than 2.2 million newly delinquent borrowers saw their scores fall by over 100 points, and more than one million by at least 150. About 2.4 million of the newly delinquent had scores above 620 beforehand, enough for many of them to qualify for a car loan, a mortgage or a card, and lost that standing in a single quarter.

Part of that drop was the pandemic boost coming back out. When the 2020 pause began, delinquent loans were marked current, and the New York Fed measured a 74-point jump in the median score of borrowers who had been behind. In late 2022 the Fresh Start program did the same for defaulted loans. Some of the 2025 scores were simply returning to where the payment record put them.

From a missed payment to default, and what each step costs

Default brings more than a credit mark. Federal Student Aid lists loss of eligibility for further federal aid, and the government has collection tools that need no lawsuit: the New York Fed lists garnishment of wages, tax refunds and Social Security payments. The Education Department restarted collections on defaulted loans on May 5, 2025, beginning with the Treasury Offset Program, which intercepts federal payments.

Then it paused part of that. On January 16, 2026 the Department delayed involuntary collections, both wage garnishment and Treasury offset, while it put in place the repayment changes of the new federal law (the Department calls it the Working Families Tax Cuts Act; Federal Student Aid's pages call it the One Big Beautiful Bill Act), including a new income-driven plan available from July 1, 2026. The release gave no restart date, so check StudentAid.gov before you plan around it. The same release says the Department reports defaults to the credit bureaus. A pause in garnishment is not a pause in credit damage, and borrowers who read it that way are making an expensive mistake.

Getting out of default helps your credit unevenly

The two main exits from default look similar and are not. Rehabilitation removes the record of the default from your credit history once it is complete. The late payments reported before the default stay. Consolidating the defaulted loan into a new Direct Consolidation Loan also ends the default, but Federal Student Aid says the record of default remains, along with the earlier late payments, which stay for seven years from when they were first reported.

If your credit score is the reason you are fixing the loan, for a mortgage next year say, rehabilitation has a credit-reporting advantage because completion removes the default record, although earlier late payments remain and the best route also depends on timing, eligibility and the repayment options. It used to be a one-time chance per loan; Federal Student Aid says that from July 1, 2027 a borrower can rehabilitate a defaulted loan twice. For loans that are only delinquent, not in default, the fix is simpler: get current or change plans before the 90-day mark, when the late payment is still invisible to the bureaus. Once a late mark is reported accurately, it can stay up to seven years; the late payments guide covers what you can and cannot do about it.

Private loans and cosigners

Private student loans are credit products in the ordinary sense. Federal Student Aid says they often require an established credit record, will almost always require a cosigner, and may cost more depending on your credit. The cosigner part matters for both people's scores. The CFPB says cosigners are equally responsible for the debt and that any late or missed payment affects both the cosigner's and the student's credit history. The FTC adds that the lender can report the loan as the cosigner's own debt and that, unless state law says otherwise, it can collect from the cosigner without first trying the student.

If a parent cosigned your loan, your late payment lands on their report the same month it lands on yours. Some lenders release the cosigner after a run of on-time payments and a credit check; ask the servicer, because the CFPB notes it may not tell you when you qualify.

Does your credit score affect getting student loans?

For most federal loans, no. Federal Student Aid says you do not need a credit check to qualify for federal student loans, except Direct PLUS Loans, and the regulation for Direct Subsidized and Unsubsidized Loans contains no credit test at all. An 18-year-old with no score and one with a 700 get the same loan at the same rate. What does block new federal aid is an existing default on a federal loan.

PLUS loans, for parents and graduate students, do check credit, but they look for an adverse credit history, not a score. The test includes qualifying delinquent, collection or charged-off debts, subject to the applicable indexed dollar threshold, and certain events such as default, bankruptcy discharge, foreclosure, repossession, tax liens, wage garnishment or federal student aid write-off during the applicable lookback period. Check the current PLUS criteria rather than treating a credit-score number as the test. Having no credit history at all does not count against you. A parent with a 650 and a clean recent record can pass; one with a higher score and a recent foreclosure may not. If denied, you can still borrow with an endorser or by documenting extenuating circumstances, plus PLUS counseling.

PLUS itself shrank in 2026. From July 1, 2026, graduate students starting a new program can no longer take grad PLUS loans, and most new parent PLUS borrowing is capped at $20,000 per student per year and $65,000 per child in total. Families who fall short are likelier to end up at private lenders, where the credit score, or a cosigner's, sets both approval and price.