In March 2020, at the start of the pandemic, the federal government paused student debt payments. When they restarted more than three years later, the government told delinquent borrowers that missed payments wouldn’t impact credit scores until fall of 2024. Now the reckoning has arrived. The Federal Reserve Bank of New York has a new report out this week estimating that more than 9 million delinquent borrowers could soon see a hit to their credit scores.

Dustin Gibson has received letters from his student loan servicer over the past year, but he hasn’t really looked at them too hard. 

“I’m an avoider by nature,” said Gibson, who is a professor of public health at Johns Hopkins University.

He’d been dutifully making payments toward his $185,000 in student debt, then stopped during the pandemic-era pause. And he hasn’t started making payments again.

“I mean, we’re 43, and we finally felt like we could breathe,” he said. “The car is being repaid off in three months, we can, like finally, begin to tackle some of the credit card debt.”

Gibson also said it’s unclear to him what’s happening at the federal level with the public service loan forgiveness program he’s enrolled in. And he doesn’t mind if his credit gets dinged.

But Constantine Yannelis, a professor of financial economics at the University of Cambridge, is concerned about all delinquent borrowers.

“This could lead to lifetime consequences, right? Because if people have damaged credit scores, it’ll be harder to do things like buy a home,” he said.

Yannelis said that could affect how much wealth they accumulate in the long term.

“So they may have less money in retirement, and we could be seeing the echoes of this problem for decades to come,” he said.

Which would hurt not just them, but the overall economy.

Even people who make payments on their student loans are having to sacrifice elsewhere, like DJ Anthony Gaffield.

He was helping his family after they lost their home in the Altadena wildfires in California, but Gaffield has institutional student loans dues.

“Then I was like, oh, shoot, I can’t pay my family anymore, just because you know you got to pay this monthly or pay this quarterly, until it’s absolved,” said Gaffield.

He’s also had to ask his landlord to let him delay paying rent.