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Stellar Snippets

Student loan borrowers might get another year before resuming payments

After a three-year hiatus, student loan payments have restarted this month. However, some borrowers will decide to delay payments even further. 

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Why, you may ask? It's because the Biden administration has introduced a 12-month 'on-ramp' to repayment.

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This will provide a shield from the consequences that would normally come with failing to make payments. 

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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.

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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.

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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.

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However, the Department of Education has made it clear that missed payments will not be reported to the credit bureaus during this period. 

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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. 

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