Federal student loan payments resumed this fall after a pause of over three years. Experts emphasize the importance of monitoring the impact on your credit, stating, “missing just one payment can cause your credit score to drop by 50 to 100 points, or more,” according to higher education expert Mark Kantrowitz.
However, prior to the October resumption of federal student loan bills, the Biden administration introduced a 12-month “on-ramp” to repayment. During this period, borrowers are shielded from most consequences of late or missed payments, with no negative marks on credit reports until the relief period ends on September 30, 2024.
While nonpayment during this period is reported as “an authorized forbearance,” it neither harms nor helps the borrower’s credit. Experts suggest making payments if affordable, as positive information should be included in credit reports during the 12-month on-ramp period.
Despite the protection, experts like Ted Rossman and Kantrowitz advise borrowers to regularly check their credit reports for accuracy. Errors, such as reporting delinquency during the on-ramp period, should be promptly addressed with the loan servicer, allowing 30 days for investigation.
