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How the Restart of Student Loan Payments Could Hurt (or Help!) Your Credit Score

The student loan moratorium started in 2020 just as the pandemic began to take hold in the U.S. The payment pause initially provided borrowers with some relief, but, as inflation soared, that wiggle room diminished due to the increasing cost of basic necessities. Recent surveys show that borrowers have put their money to use elsewhere; when payments resume, the majority of them expect to default on the debt.

Many borrowers have fallen victim to this “reverse lifestyle creep,” according to Betsy Mayotte, the founder and president of The Institute of Student Loan Advisors (TISLA), a nonprofit organization that provides free advice to borrowers.

“For a lot of people,” Mayotte recently told Money, “that money just isn’t there anymore.”