Risk & Compliance Is Growing Student Loan Debt Impacting FICO® Scores?


As students incur more student loan debt, lenders and investors in student loans are asking how this is affecting US consumers’ FICO® Scores. New FICO research provides interesting insights.

With education costs rapidly outpacing inflation, more consumers are taking out student loans to pay for their education. Looking at a large data sample from a credit reporting agency, we found that 6.2% of US consumers had two or more open student loans on their credit report in 2005. By 2012, that number grew to roughly 11.8%.

Consumers also have a greater amount of student loan debt today. In 2005, consumers with an open student loan on file had an average student loan debt of $17,233. In 2012, that number increased 54% to $26,530. This has outpaced growth for other types of debt, as the chart below shows.

StudentLoan-Chart 1112 Revised
More consumers are shouldering a greater amount of student loan debt today. We found that the percentage of consumers with student loan debt above $100,000 has more than tripled between 2005 and 2012, from 0.2% to 0.7%. To put this in perspective, about 1 million more consumers have student loan debt above $100,000 (assuming 200 million scorable consumers).

Does carrying high student loan debt mean that a consumer's FICO® Score is destined to be low?

Our research demonstrates that this isn’t the case. In fact, as the graph below shows, people can have good scores despite having high student loan balances. Approximately 7% of consumers with at least $50,000 of student loan debt have FICO® Scores in the 800s.

Before I wrap up my post, I’d like to set the record straight on exactly how student loan debt is factored into the FICO® Score:

  • A student loan receives no special treatment by the FICO® Score; it is treated like any other installment loan. The score doesn't employ any variables that specifically evaluate student loan data.
  • It makes no difference to the score if the student loan is backed by the government or a private loan from a lender.
  • Whether a student loan is deferred has no impact. Deferred loans, if reported by lenders, are considered by the algorithm and can have a positive, negative, or no impact on the score, depending on what other credit information is present.

Lastly, it's important to note that while student loan debt can factor into the FICO® Score, credit card debt has a larger influence. That's because we've found that credit card indebtedness has a stronger statistical correlation with future borrower performance than installment loan indebtedness.


  • Virginia Fleming

    I am one of those with over $100,000 in student debt, and my score will not rise above 615 because of it. I have 6 credit cards and have always paid on time. I have a car note and am never late. There are no bankruptcies or late pays on my credit report. I have no medical bills or collections on my credit report. So, I cannot for the life of me figure out why my score is so low… anyone? I am unable to get a home loan or qualify for grants because of the low score. I am doing everything right, and yet my score is low. My loans are in deferment, and I am a teacher, so they will also be erased after ten years, as I am at a Title I Charter school, and meet the criteria for loan forgiveness. Anyone have any suggestions? Is there some way or someone I can ask to recalculate my score? I am at a loss of what to do. I’d like to get a home loan…


      Thanks for your question. Since this is our B2B blog, we recommend that you check out the myfico.com consumer forums at http://ficoforums.myfico.com/ for questions about your individual FICO Score. It’s a great place to post questions like yours and to get credit scoring advice.

      • Virginia Fleming

        Thank you.