The return of student loan payments brings some changes to Federal Student Aid programs. The most notable changes include SAVE (Saving on a Valuable Education), an income-driven repayment plan that will eventually replace REPAYE (Revised Pay as You Earn); Fresh Start, a program for borrowers whose loans are currently in default; and the 12-month “on-ramp” for student loan payments.
Income-driven repayment plans: There are four income-drive repayment plans, including the SAVE plan that will automatically replace REPAYE. Learn more or sign up for an income-driven plan. Those interested in SAVE should sign up for REPAYE.
Defaulted loans: If your loan was in default before the payment pause, the temporary Fresh Start program allows you to contact your loan provider to pull your loan from default by signing up for an affordable payment plan.
“On-ramp” for student loan payments: The on-ramp policy stipulates that borrowers who miss payments in the first 12 months of repayment will not be penalized with credit score deductions or with collection agencies. However, interest will continue to accrue and compound, so it’s best to try to avoid missing payments.