Preparing for the Resumption of Student Loan Payments: What Borrowers Need to Know
The Biden administration has introduced a 12-month on-ramp to repayment for federal student loans, starting in October 2023. During this period, borrowers will have the option to delay making payments without facing negative consequences such as default or credit bureau reporting. However, interest will still accumulate on the loans. The on-ramp provides flexibility for borrowers who may need more time to adjust their budgets, but alternative options like the SAVE income-driven repayment plan, which offers monthly payments as low as $0 and prevents interest accumulation, may be more beneficial. It is advised to explore all available options before deciding on the on-ramp.