The degradation in confinement due to neoclassical tearing modes has been investigated for the (3,2) mode at ASDEX Upgrade. Besides the increased heat transport across the magnetic island, a decreased plasma density after the onset of the mode leads to a further deterioration in confinement. The relative energy loss compared to the prediction of standard scaling law saturates for large pressures at around 25%. The experimental results have been compared with numerical simulations of the nonlinear growth of neoclassical islands accounting for the increased heat transport induced by the magnetic islands. Except for the effect of the density decrease, good agreement between the observations and the simulation results is found.