A new report from Fair Isaac Corporation (FICO) reveals that over 10% of consumers with student loans are more than 90 days delinquent on payments. This has led to a 25% increase in delinquencies from last year, with an average credit score drop of 69 points, affecting 6.1 million borrowers.

Gen Z has seen the largest year-over-year credit score drop since 2020, with 34% of them carrying student loans. The impact of unpaid student loans on credit reports has only recently surfaced due to the U.S. Department of Education’s “on-ramp” period from Oct. 2023 to Sept. 2024.

Federal student loan delinquencies began showing up on credit reports in February after the Education Department resumed collections in May. This comes after the CARES Act allowed loan payment pauses until Oct. 2023. Recency and severity of delinquency are crucial factors affecting credit scores, highlighting the importance of timely payments.

Read more at Yahoo Finance: Student loan delinquencies hit record high, FICO report says