These Student Loan Grace Periods Have Ended. What Now?

A pair of programs designed to help student loan borrowers struggling with their payments sunset on Sept. 30, with major financial implications for millions of Americans. The Biden administration has allowed borrowers to ease their way back into repayment after a more than three-year pause by offering a 12-month grace period, known as the on-ramp. The initiative effectively shielded people from the consequences of missing payments, such as negative credit reporting.

At the same time, anyone in default on a federal loan held by the Education Department has been able to bring their debt back into good standing through the “Fresh Start” initiative. The program restored borrowers’ eligibility for financial aid and removed the default from their credit history. Advocacy groups have hailed both programs as critical safety nets, and some worry that borrowers will suffer in their absence. Here’s what you need to know as these temporary programs have come to an end.