End of Grace Period
The 12-month grace period, aimed at easing the transition back to student loan payments after a pause, ended on Sept. 30, exposing borrowers to potential default and credit score impacts.
This period, known as the "on-ramp," shielded borrowers from the consequences of missed payments, such as negative credit reporting, and was part of the administration's efforts to support borrowers post-pandemic.
Programs and Plans Impact
The Fresh Start program, designed to help borrowers in default regain good standing, also ended, though technical issues temporarily extended its deadline. This program was crucial for borrowers to avoid severe collection actions.
The SAVE plan, an income-driven repayment plan aimed at reducing monthly payments, faces legal challenges, leaving borrowers with fewer affordable payment options. Advocacy groups express concern over the potential financial impact on millions.