Key insights
- Complaints against debt collectors have surged, driven by rising delinquency and default rates across various loan types, especially student loans after the pandemic payment pause ended. This indicates increased financial strain on consumers, potentially leading to reduced consumer spending and negative impacts on sectors reliant on consumer credit. The rise in defaults could signal broader economic weakness.
%3Amax_bytes(150000)%3Astrip_icc()%2FGettyImages-2263878375-c1119ab445304e47aee89771513e0b7b.jpg&w=3840&q=75)
Get personalized, AI-powered answers built on 27+ years of trusted expertise.
With significantly higher delinquency and default rates across most loan types, the number of complaints against debt collectors skyrocketed in 2025.
There were 471,142 reports against debt collectors in 2025. That is more than double the number of reports submitted in 2024, according to the most recent data from the Federal Trade Commission.
Americans can report a debt collector to the FTC if the collector is using "abusive, unfair, or deceptive practices" to collect defaulted credit card, auto, medical, student loan, mortgage, and other household debts.
Especially as the Department of Education is set to resume collections and wage garnishments for defaulted student loans, this trend is essential to understand the number of defaulted borrowers and their recent experience with collections.
Federal student loan borrowers did not have to make payments during the COVID-19 pandemic payment pause, which ended in October 2023. However, most borrowers did not experience any negative impacts from missing payments until a federal grace period ended in October 2024.
The second quarter of 2025 saw the highest spike in reports about debt collectors, almost 160,000. At that point, the Department of Education had resumed collections on defaulted loans and started garnishing some defaulted borrowers' tax returns. (Although the Department of Education has been inconsistent with collection efforts since then.)
Once payments resumed, many borrowers struggled with their debt. As of December 2025, almost 3.3 million borrowers were delinquent, and 8.8 million had defaulted on their debt.
The default numbers now are higher than what is historically typical. By the end of 2019, 7.7 million borrowers were in default, and the FTC had only 135,000 debt collection reports, more than 400,000 lower than in 2025.
Most other debt types also have an increasing number of borrowers who are past due.
The percentage of credit card balances more than 90 days late is at its highest level since the second quarter of 2011. And about 5.2% of auto loans are 90+ days delinquent, the highest percentage since the end of 2010, according to the Federal Reserve Bank of New York.
Following the COVID-19 pandemic, mortgage and home equity-related credit delinquency rates remained low, as homeowners benefited from rising home values and low interest rates. That trend has started to reverse. While delinquency rates for these loan types are still lower compared to before the pandemic, they are worsening compared to 2022 and 2023.
Additionally, the average credit score fell by 1 point in October 2025, largely due to delinquent student loan and mortgage payments, according to a new FICO report.
Get personalized, AI-powered answers built on 27+ years of trusted expertise.