NEW YORK–Americans’ household balance sheets improved during the first quarter of this year, as credit card and auto loan debt was paid down, but the outlook for millions of student loan borrowers isn’t as good, according to a new report.
That’s because past-due student loans hit credit reports for the first time in five years, “tanking credit scores in the process,” noted CNN in its analysis.
The data related to how consumers are managing their debt loads was released by the Federal Reserve Bank of New York in its Quarterly Report on Household Debt and Credit.
According to the report, during the first quarter total household debt increased by $167 billion, just 0.9%, to $18.2 trillion, according to the report. Credit card and auto loan balances fell by $29 billion and $13 billion, respectively.
The first quarter typically sees a pullback in credit card debt as consumers rein in post-holiday spending and pay off those purchases, noted CNN.
‘A Large Jump’
“Transition rates into serious delinquency have leveled off for credit card and auto loans over the past year,” Daniel Mangrum, research economist at the New York Fed, said in a statement. “However, the first batch of past due student loans were reported in the first quarter of 2025, resulting in a large jump in seriously delinquent borrowers.”
The report found student loan delinquencies expectedly jumped to 7.74% from 1% following the ending of a pandemic-era pause of reporting past-due loans on credit reports.
