As of October 1st, the On-Ramp to Repayment has ended. Standard repayment rules are in effect again. This means if you miss your payment, you could be penalized, and too many missed payments may cause you to default on your student loans.
To help with the return to repayment, the Department of Education created a 12-month period called the On Ramp to Repayment. This period acts as a a safety net, and prevents borrowers from being penalized if they miss a payment during this time. This on ramp allows borrowers to not make monthly payments from October 2023 to September 2024.
If you miss a payment, you would not experience the following negative impacts during this on-ramp:
-
Student loans won’t fall into delinquency or default.
-
Missed payments won’t be reported to credit bureaus.
-
Credit scores won’t drop as a result of missed payments.
-
Missed payments won’t be reported to debt collections agencies, which can garnish or withhold tax refunds, wages, Social Security benefits and more.
-
Unpaid student loan interest won’t capitalize — or be added to your principal loan balance — after the on-ramp expires. This prevents you from eventually paying interest on a larger amount.
It's important to keep in mind that if you don't make a payment:
-
Interest will still accumulate, increasing the overall amount you’ll owe.
-
Missed payments will still be due after the on-ramp expires.
-
You won't earn any progress toward loan forgiveness under income-driven repayment (IDR) plans or Public Service Loan Forgiveness.
This on-ramp is available to any federally held student loans, and you would not need to enroll in anything to take advantage of it. You would simply not make payments in any month you could not afford it from October 2023 to September 2024.