Millions of Americans are seeing their credit scores drop sharply because the US government has started collecting student loan payments again. If payments are not made for 90 days, companies that manage student loans report these late accounts to big credit reporting agencies. This can hurt credit ratings as much as declaring personal bankruptcy. This situation can make it harder or more costly to get car loans, home loans, credit cards, and other financial services. The Federal Reserve Bank of New York said that in the first three months of 2025, more than 3 million people with student loans saw their scores go down 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 unpaid student loans again in late 2024.