Student debt can make it harder to rent an apartment
Alexander Spatari | An | Getty Images
If you’re left behind student loansFinancial experts say it may be more difficult to get a property manager to approve you for rental housing.
“Delay is a bad sign for creditworthiness, and landlords may choose not to rent to potential tenants who are struggling to pay off their student debt,” said Joel Berner, senior economist at Realtor.com.
Many people may be facing this scenario. The number of rental applicants more than 90 days delinquent on education debt more than doubled, from 15% in January to 32% in May. new analysis From TransUnion, a credit rating company. Separately, 45% of federal student loan borrowers say their debt has negatively impacted their housing plans, according to research released this month by The Institute for College Access & Success, a nonprofit that advocates for college affordability.
More than 42 million Americans have student loans and outstanding debt $1.6 trillion.
Student loan borrowers are under pressure due to a weakening labor market, numerous changes to the credit system and recent problems accessing aid programs under the Trump administration. More than 5 million borrowers are currently in default, and that total could soon rise to nearly 10 million borrowers, the Department of Education said in question earlier this year.
Have you left your student loans behind and are looking for a home to rent? Financial experts shared these five tips.
1. Show that you have resolved the delay or default
Betsy Mayotte, president of the Institute of Student Loan Counselors, a nonprofit organization that helps borrowers navigate repayment, said the best thing a student loan borrower who is delinquent and looking for new housing can do is take action to resolve the default or delinquency.
Your student loan servicer will report you to national credit rating companies as delinquent after approximately 90 days, and borrowers are generally considered to be in default if they have not made payments for at least a period of time. 270 days.
Mayotte said borrowers can often get out of default by paying off their student debt or signing up for forbearance. There is also economic hardship And unemployment deferrals Available to those who qualify, both pause your loan payments and keep them out of the red. Those further behind can contact government officials. Default Solution Group and sign up credit rehabilitation or credit consolidation.
These processes can take time — especially for those in default — but can be helpful to show the potential homeowner that you’ve taken steps to bring your payments up to date, Mayotte said.
“They may try to provide evidence that they are enrolled in these programs and include information about how the programs have made them better,” Mayotte said.
2. ‘Be upfront’ about poor credit
“Many property managers rely on credit reporting tools to evaluate potential tenants,” said LendingTree deputy editor Amanda Push. “This could be devastating for millions of borrowers who are currently behind on their student loan payments.”
Indeed, the Federal Reserve In March, it is estimated that some people who have defaulted on their student loan debt may have their scores drop by as much as: 171 points. Credit scores typically range from 300 to 850; Scores around 670 and higher are considered good. Something helpful to know: Most property managers look for a credit score above 600, and “above 650 is even better,” said Ted Rossman, senior industry analyst at Bankrate.
Push said delinquent student loan borrowers should try to start an honest conversation with prospective homeowners: “Be upfront about your bad credit history.”
Landlords may choose not to rent to potential tenants who are struggling to pay their student debt.
Joel Berner
Senior economist at Realtor.com
Push said this is a chance for you to be transparent about the reasons you’re behind on your student loans. As repayment struggles become more common, property managers may start making exceptions for education debt, he said.
“You don’t need to go into full detail, but providing context can go a long way in smoothing things over with the prospective landlord and finding you a new home,” Push said.
3. Highlight your strengths
Push said it’s also possible to find landlords who will look at criteria other than credit when deciding whether to rent to you: “A thoughtful landlord knows that a low credit score doesn’t tell the whole picture.”
“Some will put more weight on things like your income, employment and positive rental history,” he said.
Push recommends highlighting any of the above strengths to the potential homeowner. A healthy savings account and references from a previous homeowner can also be persuasive, he said.
If the landlord is concerned about your credit, you can negotiate a larger down payment or additional monthly rent, Push said.
However, if a property manager requires you to pay a larger security deposit, remember this: some states We set limits on how much you can be charged, said certified financial planner KC Smith, managing partner of Henssler Financial in Kennesaw, Georgia. The firm ranked 46th on CNBC’s 2025 Financial Advisor 100 list.
4. Consider a guarantor
Another strategy for prospective tenants struggling with student debt: co-signer or guarantor Push said he has strong credit. Doing so “can increase your chances of being approved since you won’t be the only one responsible for the rent,” he said.
According to the American Apartment Owners Association, a co-signer is equally responsible for the rent and “signs the lease and has the right to live in the rented space.” Meanwhile, the association notes that the guarantor “takes financial responsibility for the rental property if the tenant fails to pay the rent.”
If those options don’t work, you may need to “consider alternative housing options,” such as renting somewhere else or making roommate arrangements, or moving in with friends or family for a while, Smith said. [your] Credit is being repaired.”
5. Defend yourself
If you think you’ve been turned down for a rental you can actually afford, consider reaching out to the landlord and politely questioning their decision, said Ariel Nelson, senior attorney at the National Consumer Law Center.
“Homeowners generally don’t have a real appeal process, but it can help to reach out to them after the fact,” Nelson said. If you haven’t had a chance to explain your financial history and highlight the strong points, now is the time to do so.
You can also contact your local legal aid organization To help you determine whether you may have a claim under the Fair Credit Reporting Act or the Fair Housing Act, Nelson said. Such organizations can also help you find housing.
Finally, you should pull up your credit report and make sure it’s accurate, he said. Dated or incorrect signs In dispute with credit rating companies.
Disclosure: CNBC does not receive any fee for placing financial advisory firms within our organization. Financial Advisor 100 list. Additionally, the inclusion of a firm or advisor in our ranking does not constitute an individual endorsement of any firm or advisor by CNBC.
