Delinquency rates among student loan borrowers dipped last quarter relative to a year prior, according to a new analysis from the Federal Reserve Bank of New York.
Roughly 7.8 percent of student loan borrowers missed at least three monthly payments in the second quarter, according to data from the New York Fed’s quarterly report on household debt and credit. The rate of serious delinquency for such borrowers in the second quarter of 2025 was nearly 12.9 percent.
By contrast, the individual rates of serious delinquency for holders of mortgage debt, home equity lines of credit, auto loan debt and credit card debt either increased or stood pat.
Overall, total household debt decreased by $13 billion from the first to second quarter of the year to $18.77 trillion, the central bank’s New York branch reported. Nearly three-quarters of that debt was associated with housing costs.
Joelle Scally, an economic policy adviser at the New York Fed, noted delinquency rates have held steady “across most products” over the past two years.
“Still, new delinquencies for auto loans and credit cards remain at elevated levels, a trend we’ll continue to monitor,” Scally added in a release.
The quarterly report partially chalked up “distortions” in student loan delinquency rates to the “re-reporting of defaulted student debt.”
The One Big Beautiful Bill Act, which President Trump signed into law in July 2025, made sweeping changes to the Education Department’s policies regarding student loans.
Borrowers who take out loans after July 1 of this year must repay the federal government via either the Tiered Standard Plan — which adjusts according to the amount of an individual’s principal balance, the interest rate on their loans and the length of their repayment period — or the new Repayment Assistance Plan.
For borrowers who take out loans under the latter plan, their required monthly payment is based on their income and how many dependents they have, if any.
Undergraduate loans received between July 1 of this year and July 1, 2027, are subject to 6.52 percent interest, up from 6.39 percent from the prior year and more than double the rate for the 2020-21 loan period, according to the Education Department.
A federal appeals court last week also required the Education Department to erase roughly $11 billion in federal student loan debt owed by 170,000-plus borrowers.
Those borrowers had accused their colleges of misleading them or engaging in fraud, and the Trump administration last November asked for additional time to determine whether they were entitled to loan forgiveness under a 2022 settlement the Biden administration reached with the plaintiffs.
This story was updated at 4:57 p.m.
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