Current Events in May 2025

• Missing student loan payments can lower credit scores by varying amounts depending on a borrower's credit.
• Reduced credit scores lower credit limits and raise interest rates.
• Student loan borrowers with the best credit who miss payments can see their scores drop the most.

Collections restarted on millions of defaulted student loans this month, but millions of other student loan borrowers are at risk of default and will see their credit scores lowered.

Starting in Sept. 2023, borrowers had a year to resume payments before being reported to credit bureaus, a grace period that expired in Oct. 2024. Due to the pandemic, requirements to make student loan payments paused for 43 months.

Missing a monthly student loan payment makes the borrower delinquent and after 90 days of not making a payment, the borrower is at risk of default and will be reported to credit bureaus, according to Federal Student Aid.

The impact is already widespread: More than 9 million student loan borrowers of the nation's nearly 43 million are expected to have seen "substantial declines" in their credit in the first three months of 2025, according to the Federal Reserve Bank of New York.

"This would result in reduced credit limits, higher interest rates for new loans, and overall lower credit access," The New York Fed said.

A student loan borrower who has missed a payment for 90 days or more can see their credit scores drop by as little as an average of 42 points to as much as 175 points, depending on their current creditworthiness, according to a May report from credit bureau TransUnion.

Student loan borrowers with the best credit are the hardest hit.

For example, a student loan borrower with "subprime" credit would see their credit score drop by an average of 42 points, but a "super prime" borrower would see their credit score fall 175 points.

Still, TransUnion said that it is mostly student loan borrowers with poor credit that are at risk of defaulting and will see their credit scores lowered.

Nearly 51% of student loan borrowers with "subprime" credit were at risk of seeing their credit scores drop for not making a payment for 90 days or more, TransUnion said.

Student loan debt and borrowers at risk of default have ballooned in recent years after payments have been missed and more loans have been taken out.

Around 21% of student loan borrowers were 90 days or more late on their payments in February 2025, compared with around 12% a year prior, TransUnion said.

And student loan debt grew to around $1.77 trillion at the end of 2024, up from around $960 billion in 2011, according to the Education Data Initiative.

There is now more student loan debt than credit card or auto loan debt, the Education Data Initiative said.

What happens if a student loan goes into default?

After 270 days of not making a student loan payment, the borrower goes into default, according to Federal Student Aid.

The first Trump administration paused the collections of defaulted student loans during the pandemic in March 2020, a pause the Biden administration extended. Collections then restarted on May 5, 2025 under the second Trump administration.

More than 5 million student loan borrowers haven't made a payment in more than 360 days, according to the Education Department.

Federal Student Aid said these are the consequences for defaulted student loan borrowers:

• Loan acceleration: The entire unpaid balance of your loan and any interest you owe will become due immediately.
• Wage garnishment: We can begin collecting on your loan by taking money from your wages.
• Treasury offset: Your tax refunds and federal benefit payments will be withheld and applied toward repaying your loan.
• Loss of options: You will no longer be able to change repayment plans and will no longer be eligible for temporary relief options such as deferment or forbearance.

Key takeaways: 

• Vitamin A poison risk: Poison centers around the country have reported more calls related to vitamin A misuse during the measles outbreak. 

• Preventing measles: Some health care providers will prescribe a vitamin A supplement for children with measles – most often to prevent severe complications; however, in excess, it can be dangerous. 

• Protect kids: The MMR vaccine remains the best way to protect kids against measles, and parents are encouraged to consult their health care providers before starting their child on any kind of supplement regimen. 

America’s Poison Centers have shared that locations across the country are seeing a significant increase in calls related to vitamin A since the start of the measles outbreak. 

Experts say that children hospitalized with measles may receive vitamin A in an attempt to reduce the risk of serious complications. However, parents across the country have been calling poison centers with more regularity since the start of the measles outbreak. 

“At times, vitamin A may be used in the management of patients hospitalized for measles to reduce the risk of serious complications,” said Diane Calello, executive and medical director of the New Jersey Poison Control Center at Rutgers New Jersey Medical School. 

“Since taking too much vitamin A can make you sick, this supplement should only be used under the direct care and supervision of a medical provider treating a patient with measles.”

An increase in calls

Insights from the National Poison Data System (NPDS) revealed the recent uptick in vitamin A-related calls to poison centers around the country. 

Their work showed that there were 86 pediatric vitamin A exposures reported to poison centers from January 1 – March 31, 2025. Compared to that same time period in 2024, that figure represents a nearly 39% increase. 

While there has been no increase in the severity of related poisonings, the increase in calls directly correlates to the ongoing measles outbreak. 

Experts from America’s Poison Centers explain that overusing vitamin A can be toxic, and any and all use should be directed by a medical professional. Additionally, the MMR vaccine remains the best way for parents to protect their children from measles. 

Signs and symptoms of vitamin A poisoning

America’s Poison Centers also shared some of the primary signs and symptoms related to vitamin A poisoning. These include: 

• Nausea, vomiting, and stomach pain

• Headache due to intracranial pressure

• Bone pain

• Liver damage

• Vision changes 

Consumers are encouraged to contact Poison Help at 1-800-222-1222 or PoisonHelp.org if they suspect an overdose or have concerns.

• More than 5.3 million borrowers are at risk of wage garnishment as collections resume after a pandemic pause.
• Borrowers in default will soon receive notices about involuntary collection actions starting May 5
• Options remain for borrowers to rehabilitate loans or avoid collections, but time is running out.

The Education Department today (May 5) begins referring student loans that are in default to collections, ending a more than four-year pause that began during the COVID-19 pandemic.

The move affects roughly 5.3 million borrowers who have fallen into default on their federal student loans and now face severe consequences, including wage garnishment, tax refund interception, and seizure of Social Security payments. The pause on collections, first implemented in March 2020, was extended multiple times by the Biden administration but officially ended last October.

“I wanted to throw up because I already live paycheck to paycheck,” said Kat Hanchon, 33, who owes nearly $85,000 in student loans from undergraduate and graduate degrees, in an Associated Press report. Hanchon, who works in higher education IT, said she’s struggled even with an income-driven repayment plan and has not been able to make payments since late last year.

The department will soon begin sending out notices informing borrowers of upcoming collection efforts, which are scheduled to begin on May 5 through the Treasury Department’s offset program.

Understanding default and what happens next

Student loans become delinquent when payments are missed for 90 days, and after 270 days of nonpayment, loans officially go into default. Default can severely damage a borrower's credit and trigger aggressive collection actions.

The Education Department advises borrowers to check their loan status via studentaid.gov and to update their contact information to ensure they receive important notices.

Paths out of default

Options for borrowers include:

• Loan rehabilitation, where borrowers make nine consecutive monthly payments to restore their loans to good standing.

• Income-driven repayment plans, which adjust monthly payments based on income and family size.

• Forbearance for delinquent borrowers (not those already in default).

Experts emphasize acting quickly. “Loan rehabilitation is a strong option, but it can only be done once,” said Betsy Mayotte of The Institute for Student Loan Advisors.

Looking ahead

With collections set to resume imminently, millions face financial strain if they don’t take swift action. Borrowers are urged to explore their repayment and rehabilitation options to avoid the harshest penalties.

Newsletter

• Google confirms a surge in sophisticated phishing attacks targeting Gmail accounts.

• The company urges users to upgrade security by setting up passkeys, a stronger defense than traditional passwords.

• Experts warn that AI-driven phishing scams are evolving fast, making immediate action critical.

Google has confirmed growing security concerns around Gmail accounts, warning users about an uptick in phishing attacks that mimic official Google support to steal login credentials. The tech giant has issued clear guidance: users should bolster their account security by setting up passkeys to guard against these evolving threats.

According to cybersecurity firm Check Point, Google is now the second-most impersonated brand in global phishing scams, just behind Microsoft. The latest wave of attacks cleverly mimics Google’s own security protocols, tricking users into sharing sensitive information. Google emphasized it will never call users to reset passwords or troubleshoot accounts—if someone contacts you claiming otherwise, it’s a scam.

To fight back, Google is recommending the adoption of passkeys. Unlike passwords, which can be guessed or phished, passkeys are securely stored on a user's device and verified using biometrics, PINs, or similar methods. This new authentication standard is designed to be phishing-resistant and easier to use across devices.

The warning comes at a time when AI-driven cyberattacks are becoming more sophisticated, with the FBI also cautioning that these evolving threats are harder to detect. "It's time to act now," Google advises, stressing that even though passwords and two-factor authentication are still available as backups, passkeys provide the strongest defense.

With phishing scams and password attacks rising dramatically, security experts are urging users to upgrade their Gmail and other accounts immediately to avoid falling victim.

Microsoft has recently implemented a similar system, called Passwords by Default.

How to set up passkey

Not clear on what a passkey is and how it works? Google has detailed instructions that will guide you through the process.

As for what it is, passkey is an encrypted piece of code that is stored on your desktop, laptop, smartphone or other device. Once it's there, you will no longer have to use your password on that machine. 

An important point: the passkey is stored on your machine and is unique to that machine. If you have a smartphone and a laptop, you will need to install it on both of them.

If you're not a software maven, this may not make a lot of sense to you but just follow Google's instructions -- in order -- and it will be a very easy process.