Student Loan On-Ramp Ending Soon

What is it?

Back in fall 2023, the Biden Administration announced the temporary on-ramp transition period through September 30, 2024, to help borrowers ease back into repayment. It was designed to "...protect borrowers from the worst consequences of missed, late, or partial payments, including negative credit reporting for delinquent payments."

Even though payments have still been due and interest has accrued during this time, borrowers didn't technically have to pay. They could miss a payment without worrying about being reported as delinquent on their student loan payments.

This temporary on-ramp ends on September 30th, so borrowers must pay now pay each bill in October 2024 and beyond to avoid any hits to their credit.

Why does it matter?

Many borrowers have used this on-ramp period to their advantage these past few months while the Department of Education (ED) has been sorting their s....tuff out. Spend five minutes on Reddit's PSLF or Student Loans subreddit and you'll see what I'm talking about.

Put succinctly (and more professionally), they've been slow to process PSLF forms the past few months. Additionally, due to the ongoing SAVE Plan litigation, they've stopped processing online income-driven repayment (IDR) plan applications, leaving many borrowers stranded and confused. Due to the on-ramp, borrowers had some reassurance they wouldn't be penalized for non-payment.

Without the security of the on-ramp, borrowers must make their monthly payments OR be put in an appropriate deferment or forbearance so that no payments are technically due. 

If you can't afford your monthly payment, here are some options.

If you recently consolidated your loans but were placed on the Standard plan instead of the IDR plan you applied for: call your servicer and ask to be placed in a 60-day processing forbearance. 60-day processing forbearances count toward PSLF and IDR forgiveness and no payments will be due. Simple daily interest will continue to accrue, however.

If you were/are on an IDR plan already, but your income has substantially decreased since you last certified your income & family size, you have two options:

• Determine whether you're eligible for Economic Hardship Deferment. If so, fill out the application and submit it to your student loan servicer. It's usually granted for one year and counts toward PSLF & IDR forgiveness. 

• Recertify your income and family size via the paper IDR application and submit it to your servicer. Because of the processing pause, they can't technically process it, so you'll also need to call them and ask to be placed in a 60-day processing forbearance. 60-day processing forbearances count toward PSLF and IDR forgiveness and no payments will be due. Simple daily interest will continue to accrue, however.

With the on-ramp period ending, it's essential to have a plan.

I've been helping others navigate student loan repayment for years, and this is truly the most complicated and convoluted situation I've seen yet. A lot is happening that borrowers need to be aware of and pay attention to, so every borrower needs to make sure they have a plan in place.