Stellar Snippets
After a three-year hiatus, student loan payments have restarted this month. However, some borrowers will decide to delay payments even further.
Why, you may ask? It's because the Biden administration has introduced a 12-month 'on-ramp' to repayment.
This will provide a shield from the consequences that would normally come with failing to make payments.
If you're wondering if this grace period applies to you, you should know that non-qualifying loans are both commercially held Federal Family Education Loans and private student loans.
It's important to note that this is not another pause, as interest rates still apply. If you decide to use the on-ramp period, you will most likely end up with a larger bill in a year.
Some would say it's better to be on the safe side because some borrowers still had their accounts marked as past-due after failing to make their October payment.
However, the Department of Education has made it clear that missed payments will not be reported to the credit bureaus during this period.
It's recommended to reach out to the Federal Student Aid Ombudsman if you have missed a payment and feel as though you are still facing consequences.
Many borrowers will choose to utilize the on-ramp period for various different reasons, but experts still advise you to stay as on top of your payments as possible.