What If Student Loan Policy Changes Have Tanked Your Credit Score?
The COVID-19 pandemic brought plenty of uncertainty, but for student loan borrowers, the pause of student loan payments was a source of temporary relief. If you borrowed money to attend college, then as soon as the guests had left your graduation party, the worries about repaying your student loans set in. Even though student loans technically count as “good debt,” because in theory they buy you a college degree which in theory gets you a better paying job, but that only happens in the best of circumstances. Many graduates do not quickly get jobs that pay so much that they make the monthly student loan payment feel like a drop in the bucket. In the past two years, the requirement to resume their student loan payments when everything else is already so unaffordable has been a source of financial stress. Lack of clarity about how much to pay when and to whom only makes things worse, and because of this, some student loan borrowers have recently sustained major damage to their credit scores. If you want to improve your credit score while juggling student loan payments with plenty of other financial responsibilities, contact a Boca Raton credit repair lawyer.
Confusion About Repayment Rules Causes Credit Score Damage for Some Former Students
A recent article on the CNBC Make It website tells of a young Floridian woman named Kayla who got an unpleasant surprise regarding student loans and credit scores. She graduated from community college in 2020, when student loans were paused. In other words, she avoided the worst mistakes that student loan borrowers make. She graduated instead of dropping out. She entered the workforce immediately after getting her associate’s degree instead of pursuing a series of expensive degrees without a clear plan of how this would translate into economic productivity. The financial stress eventually got to her, though, and she made another wise move of trying to move to a less expensive part of Florida. When she applied for apartments, though, she found that her credit score had suddenly dropped 100 points when she had missed student loan payments she didn’t know she had to make until they were months late.
What If the Resumption of Student Loan Payments Is Only a Small Part of the Problem?
The short answer is that, if you are stressed out about student loan payments, contact your loan servicer. Kayla was able to use her savings to pay her overdue balance and then enroll in a payment plan with affordable monthly payments. If you experienced a similar rude awakening, but you have no degree and no job, the solution might not be so simple for you. Yes, you should contact your loan servicer, but it might also make sense to file for chapter 7 bankruptcy. A bankruptcy filing will not discharge your federal student loans, but it will discharge other debts and free up funds to pay your student loans.
Work With a Debt Lawyer About Dealing With Student Loan Debt
A South Florida debt lawyer can help you if student loans are just one of many financial stresses in your life. Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.
Source:
cnbc.com/2025/05/19/some-student-loan-borrowers-see-credit-scores-drop-over-100-points.html
