{"id":29922,"date":"2023-06-30T22:49:18","date_gmt":"2023-07-01T02:49:18","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/bidens-student-loan-on-ramp-explained-missed-payments-wont-hurt-credit-but-interest-keeps-adding-up\/"},"modified":"2023-06-30T22:49:19","modified_gmt":"2023-07-01T02:49:19","slug":"bidens-student-loan-on-ramp-explained-missed-payments-wont-hurt-credit-but-interest-keeps-adding-up","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=29922","title":{"rendered":"Biden\u2019s student loan \u2018on-ramp\u2019 explained: Missed payments won\u2019t hurt credit, but interest keeps adding up"},"content":{"rendered":"
\n

President Joe Biden said he was \u201cdiscouraged\u201d and \u201cangry\u201d about the Supreme Court\u2019s decision to block his student loan forgiveness plan on Friday \u2014 but there could still be some relief in sight for the roughly 40 million borrowers who would have benefited from seeing $10,000 to $20,000 of their debt disappear.\u00a0<\/p>\n

Biden announced \u201ca new path\u201d to provide student debt relief while speaking at the White House on Friday afternoon, which includes what he called \u201ca temporary on-ramp\u201d for when borrowers resume their student loan payments this October. <\/p>\n

\n

So what\u2019s the on-ramp? It\u2019s basically a year-long grace period where borrowers who miss student loan payments won\u2019t be reported to any of the credit bureaus, and they won\u2019t go into default.<\/p>\n

The president noted that when someone misses a student loan payment, they can fall into delinquency, and ultimately default on their loans if they miss too many payments, which is \u201cnot good for them, or the economy.\u201d <\/p>\n

Related: What if you can\u2019t pay back your student loans when payments start again? These are your options.<\/p>\n

Before the pandemic led to student loan payments being paused, Federal Reserve\u00a0research\u00a0put the average monthly payment at $393, while the median payment was $222. So, because many of the most vulnerable borrowers may miss a payment or two on the front end when student loan payments resume on Oct. 1, Biden said that \u201cwe\u2019re creating a temporary 12-month, what we\u2019re calling an \u2018on-ramp repayment program,\u2019\u201d to give people more time to get their finances in order.\u00a0<\/p>\n

To be clear, Biden noted this on-ramp is not the same thing as a student-loan payment pause; monthly payments will still be due, and loans will still be accruing interest. But if borrowers miss payments when loan payments resume, they will be spared some of the worst consequences \u2014 for a year, anyway.\u00a0<\/p>\n

The White House spelled the on-ramp out in a fact sheet released after the president\u2019s remarks. It explains that the Department of Education has created the on-ramp to protect the most vulnerable borrowers \u201cfrom the harshest consequences of late, missed, or partial payments for up to 12 months,\u201d the statement said. This will run from Oct. 1, 2023 through Sept. 30, 2024.\u00a0<\/p>\n

During this time, the White House noted that student loan payments will still be due, and interest will still accrue on them. But \u2014 key for people worried about their credit scores \u2014 borrowers will not be reported to credit bureaus, be considered in default, or referred to collection agencies for late, missed, or partial payments during the on-ramp period, the White House said.\u00a0\u00a0<\/p>\n

And borrowers do not need to take any action to qualify for this on-ramp.<\/p>\n

\u201cIf you can pay your bills, you should,\u201d Biden said. \u201cBut if you cannot, you miss payments, the on-ramp temporarily removes the threat of defaulting or having your credit harmed, which can hurt borrowers for years to come.\u201d\u00a0<\/p>\n

Check out his full remarks here:\u00a0<\/p>\n

And read more on the Supreme Court\u2019s decisions on student-loan forgiveness and affirmative action at MarketWatch.\u00a0<\/p>\n

The Supreme Court just blocked student-loan cancellation. Here\u2019s what happens next for your loans.<\/p>\n

Biden turns to Higher Education Act for next move on student loans after Supreme Court rejection of forgiveness plan<\/p>\n

Republican presidential candidates praise SCOTUS decision. Democrats blast ruling.<\/p>\n

Supreme Court\u2019s ruling against affirmative action leaves defense-related loophole<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

President Joe Biden said he was \u201cdiscouraged\u201d and \u201cangry\u201d about the Supreme Court\u2019s decision to block his student loan forgiveness plan on Friday \u2014 but there could still be some relief in sight for the roughly 40 million borrowers who would have benefited from seeing $10,000 to $20,000 of their debt disappear.\u00a0 Biden announced \u201ca […]<\/p>\n","protected":false},"author":1,"featured_media":29923,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[236],"tags":[83],"class_list":["post-29922","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-news","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nBiden\u2019s student loan \u2018on-ramp\u2019 explained: Missed payments won\u2019t hurt credit, but interest keeps adding up | iFintechWorld<\/title>\n<meta name=\"description\" content=\"President Joe Biden said he was 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