Millions of Americans are seeing their credit scores drop sharply because the US government has started collecting missed student loan payments again. After 90 days without payment, student loan companies report these late accounts to credit bureaus, which can damage credit ratings as much as declaring personal bankruptcy. This makes it harder or more expensive to get car loans, mortgages, credit cards, and other financial services. The Federal Reserve Bank of New York reported that in the first three months of 2025, over 3 million student loan borrowers experienced a significant drop in their scores. The US Department of Education stopped federal student loan payments in March 2020 because of the pandemic, and they restarted in 2023 with an extra year of grace. However, the Trump administration began collecting outstanding student loans again in late 2024.