FRESNO, Calif. (KSEE/KGPE) – 9.7 million student loan borrowers could see their credit scores tank by more than 100 points this year. Student loan delinquencies are also set to hit record highs, and those borrowers hold more than $250 billion in debt. In fact, 15.6% of all federal loans were p ast due last year. “This is, you know, Cinderella's carriage turning into a pumpkin for a lot of people right now,” Financial Advisor with Ford Financial Group Brian Ullmann said. This, after the Federal Reserve Bank of New York released its biennial report on student loans. “I think some people were holding out, hoping for forgiveness, total forgiveness. You know, we saw plenty of instances like that where there's PPE loans being forgiven during COVID,” Ullmann said. New student loans are taking big bites out of credit scores, averaging 87-point deductions for subprime borrowers and 171 points for prime borrowers. “This is going to result in a whole lot of people having reduced credit limits, higher interest rates for new loans and overall lower credit access, which reduces borrowing and in turn reduces spending among this kind of subset of Americans,” Ullmann said. People haven’t factored student loan payments because of four and a half years of student loan forgiveness, given by the Biden administration. That ran up on Sept. 30, 2024. “You've got to pay what you pay back,” Ullmann said. Ullman doesn’t believe the record delinquency alone will have a major effect on the economy. “It can add to what is already seemingly a bit of an economic slowdown that we're experiencing. I don't think it alone would cause a slowdown,” Ullmann said. When it comes to digging out of the hole created by student loans, Ullmann says they have to pay up. “Any of these solutions are going to include paying back your student loan to some degree,” Ullmann said. He says one of the first things borrowers should do if they have student loans is to call a loan servicer to see what options are available to them. ...read more read less