Details of the federal student loan on-ramp and SAVE Plan

The three-year pause on federal student loan interest and payments has come to an end. Interest began accruing on September 1, 2023, and payments resumed last October. In order to ease federal student loan borrowers back into making payments, the U.S. Department of Education introduced measures to assist borrowers. One way they’re doing this is with a 12-month “on-ramp” that will remove the threat of reporting delinquency for those who are not able to make payments. The government also has amended and added options for income-driven repayment (IDR) plans which adjust monthly payments based on income levels. Read on for more details about how these programs work, and if they could benefit you.

What is the on-ramp period?

Normally if you do not make your student loan payments, it will be reported to credit bureaus and negatively affect your credit score and history. According to the Department of Education, the on-ramp time period – lasting through Sept. 30, 2024 – protects borrowers from having a delinquency reported to credit reporting agencies. (Only loans eligible for the original payment pause will be eligible for this provision.)

Does this mean you get a free pass to get out of student loan payments? Not exactly. Payments are technically still due during this period, and interest will continue to accrue. While accounts will not be reported as delinquent to credit bureaus, your billing statements will note your account status as delinquent. In addition, credit companies could still factor in missed or delayed payments. If you are able to make your payments without financial hardship, you should do so. If you are unable to make payments, an income-driven repayment plan could help.


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