Managing federal student loan payments

Have federal student loans? I'm not sure if you've heard but the on-ramp transition period will be ending soon on September 30th, 2024.?

On-ramp is a courtesy benefit to borrowers that began after the COVID-19 pandemic, when federal student loan payments were paused, and interest rates were set to 0%. The on-ramp allowed borrowers to transition back into repayment gradually after this pause ended.

During the on-ramp period, borrowers were not penalized for missing payments, and their loans were not placed into default, even if payments weren't made. However, interest still accrued during this time. The on-ramp was designed to give borrowers time to adjust their finances before resuming regular payments without the immediate threat of penalties or negative credit reporting.

Why is On-Ramp Ending Important?

If you've missed a payment on your federal student loans in the past year, it may not have counted toward penalties like putting your loan balance in default or even reporting the missed payment to the credit bureaus.?

But now, that this transition period is ending, standard penalties and credit reporting practices coming back into effect.

If you've been having trouble making payments on your student loans consistently, here are some options that can still be helpful.?

• Check to see if your monthly payment can be reduced by signing up for an Income-Driven Repayment (IDR) Plan
• Check to see if you're eligible for targeted forgiveness
• Look into consolidating your federal student loans which could lower your monthly payments
• Update your budget and make sure?you have a clear picture of your monthly income and expenses. Adjust your spending habits as needed to accommodate this added expense
• If you're still struggling to make payments, don’t hesitate to reach out to your loan servicer. They can provide options like deferment, forbearance, or even temporary payment reductions to help you through tough times

Hope this helps!

xoxo

Your Financial Coach,

Dorethia