Americans’ credit card debt falls, but past-due student loans drag on credit scores

Americans’ credit card debt falls, but past-due student loans drag on credit scores

Americans tidied up their household balance sheets to start 2025, cleaning up some credit card and auto loan debt. However, the debt outlook for millions of student loan borrowers was much grimmer.

Black student borrowers could face collection crisis

The Department of Education has begun collection proceedings on the more than five million people who’ve defaulted on their federal student loans.That means financial pain — wage garnishment, seized tax refunds, offset social security checks, and wrecked credit scores — is in the future for people who haven’t made a payment in the past 270 days.Black people, who hold a disproportionate amount of student loan debt and are more likely to default —…

Trump administration moves to garnish wages of defaulted student loan borrowers: What to know

A CNBC story about the Trump administration's move to garnish wages of defaulted student loan borrowers sparked many readers to write in. Here's what we know.

What to know as student loan collections resume

After a five-year pause that began as part of Covid relief efforts, student loan collections resumed on May 5, 2025. For borrowers, this means that if their loans are in default — for federal student loans, that occurs after 270 days or more of non-payment — they could face seizure of their wages as well as of their tax refunds and federal benefits. The restart comes as part of the Trump administration’s “focus on recouping payments from default…