CHICAGO—Credit unions may need to brace for higher stress on credit card and personal loan portfolios as millions of federal student loan borrowers, facing the return of repayment and potential involuntary collections, indicate they will prioritize other debts ahead of these CU products, according to new TransUnion data.
TransUnion said that an early examination of delinquent federal student loan borrowers across the credit portfolio over the period from December 2024 to June 2025 supports this sentiment.
“While serious delinquency rose across each of these credit products among the delinquent student loan population, the rate of growth was generally aligned with the priorities reflected in the survey. Secured products, such as mortgages and auto showed a significantly lower increase in delinquencies than unsecured personal loans and credit cards,” TransUnion said
TransUnion said it is worth noting that these delinquency figures (table above) only apply to the population of seriously delinquent student loan borrowers, which represents just over five million of the more than 200 million credit-active U.S. consumers.
“During the extended federal student loan payment pause, many borrowers took on additional credit—possibly to manage rising living costs or other financial obligations,” said Joshua Turnbull, senior vice president and head of consumer lending at TransUnion. “Now, with payments resuming, borrowers are facing a financial reckoning. Combined with the broader impact of elevated inflation and a higher cost of living, the threat of involuntary collections is causing a potential shake-up amidst the traditional payment hierarchy. Many are being forced to make difficult, short-term prioritization decisions as cash flows fail to meet spending and debt obligations.”
As part of the same TransUnion survey, nearly half of federal student loan borrowers currently missing payments indicated they were not making those payments simply because of affordability concerns. Another one-third responded that they were being forced to make the tough decision to prioritize other bills ahead of repaying their student loans.
“These challenging decisions are likely to persist for at least the short term, as the percentage of federal student loan borrowers reported as seriously delinquent has remained stubbornly high in recent months,” TransUnion said.
The most recently available data for July 2025 reveals that 29.0% of federal student loan borrowers in repayment—or 5.4 million individuals—were reported to be 90 or more days past due (90+ DPD). This is essentially flat compared to June 2025. While slightly down from its peak of 31.0% in April 2025, this nevertheless marked the fifth consecutive month in which more than five million federal student loan borrowers were 90+ DPD, TransUnion said.
“While the percentage of federal student loan borrowers who are seriously delinquent has slightly subsided in recent months, it continues to remain decidedly elevated,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. “We’re closely monitoring this population as they approach default status at 270 days past due, which could trigger involuntary collections. Once these actions begin, we anticipate that we may see an unprecedented shift in payment hierarchy where student loans are no longer at the bottom.”