When the US government started collecting student loan payments again, many Americans saw their credit scores drop. If people miss payments for three months, loan companies report this to credit agencies, which can seriously damage their credit score, similar to declaring bankruptcy. This makes it harder or more expensive to get loans for cars, homes, or credit cards. The Federal Reserve Bank of New York reported that in early 2025, over three million people with student loans had their scores drop a lot. The US Department of Education stopped federal student loan payments in March 2020 because of the pandemic. They started again in 2023, with an extra year before payments were due. However, the Trump administration began collecting these loans again in late 2024.