(NewsNation) — Some student loan borrowers are facing penalties with late payments on federal student loans.

More than nine million borrowers could face large drops in credit scores once delinquencies appear on credit reports for the first half of 2025, according to new research from the Federal Reserve Bank of New York.

After a pandemic-era pause on federal student loan payments ended in September 2023, the Biden administration offered borrowers a 12-month “on-ramp” repayment plan, which shielded borrowers from most consequences of falling behind on payments. That ended in September 2024.

When that repayment period ended, the New York Fed estimated that the volume of past-due payments reached 15.6%, with more than $250 billion in delinquent debt.

The Fed’s report said it is reasonable to expect student loan delinquency to surpass pre-pandemic levels when new delinquencies start to hit credit reports.

The Fed said new delinquencies on student loans could reduce credit scores by as much as 150 points depending on what a borrower’s previous score was. It could result in reduced credit limits, higher interest rates for new loans and overall lower credit access.