As we move deeper into 2024, millions of Americans must prepare for the return of regular student loan payments. By September 30th, two critical relief programs—the 12-Month On-Ramp and the Fresh Start initiative—will end, potentially impacting borrowers who have not yet taken action.
The 12-Month On-Ramp: What You Need to Know
In response to the financial challenges many faced during the COVID-19 pandemic, the Department of Education introduced a 12-month "on-ramp" period from October 2023 to September 2024. This gave borrowers temporary relief, allowing missed, partial, or late payments without facing default, adverse credit reporting, or collections.
But now, with the end of the on-ramp fast approaching, borrowers will once again be responsible for making timely payments. This means:
No more payment leniency for missed or late payments.
Default becomes a real risk for those who don’t resume regular payments.
Credit reporting and collections will resume as normal.
Now is the time to review your repayment plan options. Whether you're on an Income-Driven Repayment (IDR) plan, a standard plan, or something else, ensure you're enrolled in a plan that fits your financial situation. If you don't act now, you could face significant financial difficulties when enforcement returns to normal.
The Fresh Start Initiative: A One-Time Lifeline for Defaulted Borrowers
For borrowers in default, the Fresh Start initiative provided a rare chance to regain control of your loans. This program allows borrowers to bring their loans back into good standing without needing to pay the entire amount of past-due payments. But this opportunity is also ending.
Here’s why Fresh Start matters:
You won’t need to pay the full amount of arrears to bring your loans into good standing.
You’ll have the opportunity to remove the default status from your credit and avoid aggressive collection efforts.
This may be your last chance to get out of default and set up a more manageable repayment plan.
With both the 12-month on-ramp and Fresh Start initiative ending, now is the time to act. Borrowers who fail to take action may face serious financial consequences, including default, negative credit impacts, and increased loan balances due to accumulating interest and fees.
At Student Debt Solutions (SDS), we are here to help you navigate these changes. Our platform provides tools to help you explore your repayment options, lower your monthly payment, or even identify loan forgiveness opportunities. Don’t wait until it’s too late—let us assist you in finding a solution that works for your financial future. Log in to your account and explore your options!