Credit scores could drop by more than 150 points for some borrowers and will likely result in "reduced credit limits, higher interest rates for new loans and overall lower credit access" for affected borrowers, according to a Federal Reserve Bank of New York report posted Tuesday.

Some student loan borrowers are facing penalties with late payments on federal student loans. Over 9 million borrowers could face large drops in credit scores once delinquencies appear on credit reports for the first half of 2025,

Millions of student loan borrowers could see steep credit score declines in 2025 due to delinquency reports. However, repayment plans and other options can help minimize the damage.