When the US government began collecting student loan payments again, many Americans saw their credit scores fall. If people don't pay for three months, loan companies report this to credit bureaus, which can seriously harm credit ratings, similar to going bankrupt. This makes it harder or more expensive to get loans for cars, homes, credit cards, and other financial services. The Federal Reserve Bank of New York reported that in early 2025, over three million student loan borrowers experienced a significant drop in their scores. The US Department of Education had stopped federal student loan payments in March 2020 because of the pandemic, but they restarted in 2023 with a one-year period of easier terms. However, the previous government began collecting overdue student loans again in late 2024.