Source: Fortune
Summary
The Trump administration’s aggressive student loan collection efforts have led to a record number of borrowers defaulting on their loans, resulting in a significant decline in credit scores among young Americans. According to a FICO report, the national average credit score fell to 714 in the second half of 2025, with 14.4% of people aged 18-29 experiencing a 50-point or more decline in their credit scores. Student loan delinquencies have hit record highs, with 7.7 million borrowers defaulting on $181 billion in federal student loans. The decline in credit scores can have long-term ramifications, including reduced employment opportunities and limited access to affordable loans.
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The numbers tell one story.
Gen Z is facing a credit score crisis, with 14.4% of 18-29-year-olds experiencing a 50-point or more decline in their credit scores. Student loan delinquencies are at record highs, with 7.7 million borrowers defaulting on $181 billion in federal student loans. The Trump administration’s aggressive collection efforts have led to a surge in credit score declines. The long-term effects of this crisis will be felt for nearly a decade, limiting economic mobility for Gen Z. The strategy enters a familiar phase: blaming borrowers for not paying their loans.
Author: Evan Null
