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Household Debt Reaches $18.2 Trillion as Student Loan Delinquencies Trigger Credit Score Plunge

BLACKPRESSUSA NEWSWIRE — The figures are a dramatic increase from the previous delinquency rate, which had remained below 1 percent due to the years-long pause in federal student loan payments.

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By Stacy M. Brown
Black Press USA Senior National Correspondent

The Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit reveals a sharp rise in total household debt, reaching $18.20 trillion in the first quarter of 2025. While some categories of debt, such as credit card and auto loans, experienced modest declines, student loan balances jumped by $16 billion to $1.63 trillion, with a notable surge in delinquencies following the end of federal student loan payment protections. According to the report, nearly six million student loan borrowers—representing about 14 percent—were 90 or more days delinquent or in default between January and March 2025. In total, 13.7 percent of borrowers were at least 90 days past due, while 23.7 percent were behind but not yet seriously delinquent. The figures are a dramatic increase from the previous delinquency rate, which had remained below 1 percent due to the years-long pause in federal student loan payments.

The payment freeze, initially introduced during the COVID-19 pandemic, lasted 43 months. Although payments resumed in October 2023, the U.S. Department of Education granted a 12-month “on-ramp” period during which missed payments were not reported to credit bureaus. That grace period ended in late 2024, prompting a flood of newly reported delinquencies in early 2025. The consequences have been swift and severe for millions of borrowers. According to the New York Fed, more than 2.2 million individuals newly marked as delinquent have seen their credit scores fall by over 100 points, while over 1 million have experienced drops of at least 150 points. These drops in credit scores threaten borrowers’ access to affordable financing options across the board.

“Your credit score is one of the most important numbers in your financial life,” Ted Rossman, senior industry analyst at Bankrate, told Newsweek. The New York Fed found the average drop for newly delinquent student loan borrowers was 177 points for those who had scores above 720. Borrowers with credit scores between 620 and 719 saw an average decline of 140 points, while those below 620 dropped by an average of 74 points. For many, the impact of these declines will reverberate for years. “There is very little in life that is more expensive than having bad credit,” said Matt Schulz, chief consumer finance analyst at LendingTree. “It can literally cost you tens of thousands of dollars or more over the course of your life.”

Newsweek noted that more than 2.4 million newly delinquent borrowers previously had credit scores above 620, making them eligible for traditional credit cards, auto loans, and mortgage financing. Falling below that threshold could now disqualify them from such products or saddle them with higher interest rates. The implications are especially dire for prospective homebuyers. The minimum credit score for a conventional mortgage is 620, and borrowers at that level currently face a 30-year fixed mortgage rate of 7.89 percent, according to Experian. In contrast, borrowers with a credit score of 780 pay 7.07 percent. For a $300,000 loan, that difference could amount to $60,000 more in interest over the life of the loan.

“Home prices and interest rates are already sky-high. Having less-than-perfect credit means that you may get stuck with an interest rate that’s even higher than the average,” Schulz said. “And, of course, a low enough credit score may mean that you don’t even get the mortgage at all.” Student loan delinquency also disproportionately affects older borrowers. The New York Fed reported that the average age of a delinquent borrower has risen from 38.6 to 40.4 years old. Delinquency rates are lowest among borrowers under age 30, indicating that older millennials—many of whom already face economic headwinds—are struggling most with resumed payments.

Non-housing debt fell overall by $38 billion, or 0.8 percent, in the first quarter. Credit card balances decreased by $29 billion to $1.18 trillion, and auto loan balances dropped by $13 billion to $1.64 trillion—only the second quarter-over-quarter decline since 2011. Other consumer loans, including retail cards, fell by $12 billion. Despite those declines, total household debt continued to rise due to increases in housing-related balances. Mortgage balances grew by $199 billion, reaching $12.80 trillion, while balances on home equity lines of credit (HELOCs) rose by $6 billion to $402 billion. HELOC balances have now increased for 12 straight quarters and are $85 billion above the low recorded in early 2022.

Aggregate delinquency rates also rose, with 4.3 percent of all outstanding debt in some stage of delinquency. While delinquency transitions remained stable for auto loans, credit cards, and other debts, student loans were the clear driver of the recent surge in overall delinquency. Experts advise borrowers who have damaged their credit scores to take gradual, responsible steps to rebuild. “It’s about doing the right things over and over, and unfortunately, a single major mistake can undo years of consistent work,” Schulz said. Rossman added that staying current on student loan payments and all other obligations is key. “Consider getting on a parent or spouse’s credit card as an authorized user or applying for secured credit cards and credit-builder loans,” he said. “Those are safe tools to help start the rebuild.”

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#NNPA BlackPress

Trump Set to Sign Largest Cut to Medicaid After a Marathon Protest Speech by Leader Jeffries

BLACKPRESSUSA NEWSWIRE — The bill also represents the biggest cut in Medicare in history and is a threat to the health care coverage of over 15 million people. The spending in Trump’s signature legislation also opens the door to a second era of over-incarceration in the U.S.

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By Lauren Burke

By a vote of 218 to 214, the GOP-controlled U.S. House passed President Trump’s massive budget and spending bill that will add $3.5 trillion to the national debt, according to the Congressional Budget Office (CBO). The bill also represents the biggest cut in Medicare in history and is a threat to the health care coverage of over 15 million people. The spending in Trump’s signature legislation also opens the door to a second era of over-incarceration in the U.S. With $175 billion allocated in spending for immigration enforcement, the money for more police officers eclipsed the 2026 budget for the U.S. Marines, which is $57 billion. Almost all of the policy focus from the Trump Administration has focused on deporting immigrants of color from Mexico and Haiti.

The vote occurred as members were pressed to complete their work before the arbitrary deadline of the July 4 holiday set by President Trump. It also occurred after Democratic Leader Hakeem Jeffries took the House floor for over 8 hours in protest. Leader Jeffries broke the record in the U.S. House for the longest floor speech in history on the House floor. The Senate passed the bill days before and was tied at 50-50, with Republican Senator Lisa Murkowski saying that, “my hope is that the House is gonna look at this and recognize that we’re not there yet.” There were no changes made to the Senate bill by the House. A series of overnight phone calls to Republicans voting against, not changes, was what won over enough Republicans to pass the legislation, even though it adds trillions to the debt. The Trump spending bill also cuts money to Pell grants.

“The Big Ugly Bill steals food out of the hands of starving children, steals medicine from the cabinets of cancer patients, and equips ICE with more funding and more weapons of war than the United States Marine Corps. Is there any question of who those agents will be going to war for, or who they will be going to war against? Beyond these sadistic provisions, Republicans just voted nearly unanimously to close urban and rural hospitals, cripple the child tax credit, and to top it all off, add $3.3 trillion to the ticking time bomb that is the federal deficit – all from a party that embarrassingly pretends to stand for fiscal responsibility and lowering costs,” wrote Congressional Black Caucus Chairwoman Yvette Clarke (D-NY) in a statement on July 3.

“The Congressional Budget Office predicts that 17 million people will lose their health insurance, including over 322,000 Virginians. It will make college less affordable.  Three million people will lose access to food assistance through the Supplemental Nutrition Assistance Program (SNAP). And up to 16 million students could lose access to free school meals. The Republican bill does all of this to fund tax breaks for millionaires, billionaires, and corporations,” wrote Education and Workforce Committee ranking member Rep. Bobby Scott (D-VA) in a statement. The bill’s passage has prompted Democrats to start thinking about 2026 and the next election cycle. With the margins of victory in the U.S. House and U.S. Senate being so narrow, many are convinced that the balance of power and the question of millions being able to enjoy health care come down to only several thousand votes in congressional elections. But currently, Republicans controlled by the MAGA movement control all three branches of government. That reality was never made more stark and more clear than the last seven days of activity in the U.S. House and U.S. Senate.

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WATCH: NNPA Publishers Pivot To Survive

7.2.25 via NBC 4 Washington

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7.2.25 via NBC 4 Washington

https://youtube.com/watch?v=9oZc5Sz0jQQ&feature=oembed

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#NNPA BlackPress

Congressional Black Caucus Challenges Target on Diversity

BLACKPRESSUSA NEWSWIRE — we found that the explanations offered by the leadership of the Target Corporation fell woefully short of what our communities deserve and of the values of inclusion that Target once touted

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By Stacy M. Brown
Black Press USA Senior National Correspondent

Target is grappling with worsening financial and reputational fallout as the national selective buying and public education program launched by the Black Press of America and other national and local leaders continues to erode the retailer’s sales and foot traffic. But a recent meeting that the retailer intended to keep quiet between CEO Brian Cornell and members of the Congressional Black Caucus Diversity Task Force was publicly reported after the Black Press discovered the session, and the CBC later put Target on blast.

“The Congressional Black Caucus met with the leadership of the Target Corporation on Capitol Hill to directly address deep concerns about the impact of the company’s unconscionable decision to end a number of its diversity, equity, and inclusion efforts,” CBC Chair Yvette Clarke stated. “Like many of the coalition leaders and partner organizations that have chosen to boycott their stores across the country, we found that the explanations offered by the leadership of the Target Corporation fell woefully short of what our communities deserve and of the values of inclusion that Target once touted,” Congresswoman emphasized.  “Black consumers contribute overwhelmingly to our economy and the Target Corporation’s bottom line. Our communities deserve to shop at businesses that publicly share our values without sacrificing our dignity. It is no longer acceptable to deliver promises to our communities in private without also demonstrating those values publicly.”

Lauren Burke, Capitol Hill correspondent for Black Press of America, was present when Target CEO Cornell and a contingent of Target officials arrived at the U.S. Capitol last month. “It’s always helpful to have meetings like this and get some candid feedback and continue to evolve our thinking,” Cornell told Burke as he exited the meeting. And walked down a long hallway in the Cannon House Office Building. “We look forward to follow-up conversations,” he stated. When asked if the issue of the ongoing boycott was discussed, Cornell’s response was, “That was not a big area of focus — we’re focused on running a great business each and every day. Take care of our teams. Take care of the guests who shop with us and do the right things in our communities.”

A national public education campaign on Target, spearheaded by Dr. Benjamin F. Chavis Jr., president and CEO of the National Newspaper Publishers Association (NNPA), the NNPA’s board of directors, and with other national African American leaders, has combined consumer education efforts with a call for selective buying. The NNPA is a trade association that represents the more than 220 African American-owned newspapers and media companies known as the Black Press of America, the voice of 50 million African Americans across the nation. The coalition has requested that Target restore and expand its stated commitment to do business with local community-owned businesses inclusive of the Black Press of  America, and to significantly increase investment in Black-owned businesses and media, Historically Black Colleges and Universities (HBCU, Black-owned Banks, national Black Church denominations, and grassroots and local organizations committed to improving the quality of life of all Americans, and especially those from underserved communities. According to Target’s latest earnings report, net sales for the first quarter of 2025 fell 2.8 percent to $23.85 billion compared to the same period last year. Comparable store sales dropped 3.8 percent, and in-store foot traffic slid 5.7 percent.

Shares of Target have also struggled under the pressure. The company’s stock traded around $103.85 early Wednesday afternoon, down significantly from roughly $145 before the controversy escalated. Analysts note that Target has lost more than $12 billion in market value since the beginning of the year. “We will continue to inform and to mobilize Black consumers in every state in the United States,” Chavis said. “Target today has a profound opportunity to respond with respect and restorative commitment.”

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