ABC News: Collection on Student Loans Could Harm Credit Scores

Brett T. | 12:00 AM on May 04, 2025

As Twitchy has reported, the Department of Education will begin collecting on student loans in default starting next week, possibly by garnishing wages or helping itself to tax returns. President Donald Trump is doing this because, as they claim, he wants them all "broke and in jail or dead." Loan collection was paused for the COVID pandemic, but that's over now. Certainly, these people knew the day would come when the government would return to collecting on their loans.

ABC News notes that this could harm the credit scores of millions of borrowers.

Pres. Trump's administration is set to begin collecting defaulted student loan payments next week — which could harm the credit scores of millions of borrowers. https://t.co/UNx5yI4qEl
— ABC News (@ABC) May 3, 2025

Max Zahn reports:

President Donald Trump's administration is set to begin collecting defaulted student loan payments next week -- which could harm the credit scores of millions of borrowers.
Roughly 5 million borrowers will have their university and college loans sent for collections beginning May 5, the Department of Education said last month.
When that happens, the borrowers' credit scores could be impacted, since ratings agencies are often alerted when collections ensue, experts told ABC News.

Ah, yes, "experts."

More than 9 million student loan borrowers will face “significant drops” in their credit score when delinquencies resume over the first half of 2025, the New York Federal Reserve found in March.
“These credit score effects show up with delinquencies – that’s when the credit score takes the hit,” Judith Scott-Clayton, a professor of economics and education at Teachers College, Columbia University, told ABC News.

And?