Student loan payments were put on pause during the COVID-19 pandemic, but since the government has declared that the public health emergency is officially over, student loan payments restarted earlier this fall. Interest had already started at the beginning of September — meaning that the amount you owed had already begun increasing, even before payments were due. 

With many borrowers facing tough financial decisions this holiday season, and some folks making payments for the very first time, it’s important to understand all the options you have available when it comes to your student loans. 

For more, here’s how a first-time student loan payer got ready for payments to start. 

When did my student loan payments start up again?

Though student loan payments officially resumed on Oct. 1, 2023, your specific payment date is up to your loan servicer, so be sure to know your servicer’s specific guidance. Whether you’re a student loan veteran or it’s your first time paying, you need to find out who your student loan servicer is. Essentially, your loan servicer is the company in charge of making sure you pay your student loans, and it’s who you should talk to if you think you’re going to be behind on your payments. 

Regardless of whether you’re a student loan newbie, listening to expert advice for borrowers is always a good idea when it comes to making decisions about your student loans. Arming yourself with good information is helpful when making decisions that might feel overwhelming. 

What happens if I decide not to pay my student loans? 

There is a timeline for what could happen if you decide not to repay your student loans. It’s not pretty and it includes some serious consequences. 

But before we get to those consequences, let’s break down exactly what happens if you don’t pay your student loans. 

First, failing to pay your student loans can have the same consequences as failing to pay your credit card bill. Your credit score may take a hit if you allow your loans to become delinquent or if you default on your student loans. 

Let’s say that you stop making your monthly student loan payments. The first day after you miss a payment on your due date, your loan becomes delinquent. According to the Federal Student Aid website, that amount will be considered delinquent until it is paid off. 

If you allow your student loan to become delinquent, and it remains delinquent for 270 days, your loan will move into default. Defaulting on a loan means that you have failed to pay your loan as you agreed to when you took out your loan. Your servicer is not going to just let you default without communicating with you — it should make several attempts to contact you before your loan goes into default. 

Once your loan goes into default, there are more consequences. The federal government is serious when it comes to reclaiming its money. The government might seize your tax return or garnish your wages to help pay off your loan. Having your wages garnished essentially means the government takes a bit of your monthly income to pay back the loans. Your credit score will also take a hit if you allow your loan to go into default. 

Most of these negative consequences for not paying your student loan will be temporarily suspended during the “one-year on-ramp” for restarting payments.

What is the one-year on-ramp for student loan payments? 

When President Joe Biden announced the end of the student loan payment pause, he instituted a one-year on-ramp period that will reduce or eliminate many of the negative consequences of not paying your student loans.

The on-ramp is a 12-month period beginning Oct. 1 and lasting until Sept. 30, 2024. During this year, some of the most serious consequences of not paying your student loans will be paused. That means no delinquency, default, hits to your credit score or any other of the unfortunate things that can come from not paying your loans. 

However, borrowers who miss student loan payments should proceed with caution. Just because the consequences of not paying your loans have been paused, that doesn’t mean that the balance of your loan money won’t keep increasing due to additional interest. Although missing a payment under the on-ramp feels like it’s consequence-free, it really isn’t. Once the on-ramp is over, you will be on the hook for any interest that you accrued over the year. 

What should I do if I can’t afford to pay my student loans? 

If you can’t afford to pay your student loans, your best move is to contact your lender and ask about adjusting your repayment plan. 

Your lender could suggest a few options, including deferment or forbearance. Each option lets you temporarily postpone or reduce your student loan payments.

With deferment, no interest will accrue to most loan balances. With forbearance, interest will accrue on your loan balance. Deferment requires a qualifying event, such as becoming a student, enlisting in the military or losing a job. If you don’t qualify for deferment, forbearance can pause payments for up to a year. Neither deferment nor forbearance will impact your credit score.

If deferment or forbearance won’t work for you and your loan, don’t worry, you still have other repayment options that may help you keep making progress on paying off your loans at a level you can afford. 

What are income-driven repayment plans?

Income-driven repayment plans are programs that adjust the terms of your loan based upon the constraints of your income. 

Four income based repayment plans are currently available: the Pay As You Earn repayment plan, or PAYE; the Income-Based Repayment plan, or IBR; the Income-Contingent Repayment plan, or ICR; and the Saving on a Valuable Education plan, or SAVE. The SAVE plan is the newest addition to this lineup and is the Biden administration’s strategy to help borrowers manage their loan repayments by closely tying payment size to a borrower’s income and family size. 

For more, here’s a closer look at the SAVE plan. 

The bottom line on missing student loan payments

When you find yourself in a tricky situation involving your student loans, the best thing to do is contact your loan servicer to learn about all of your options to manage your student loans in a more sustainable way. The transition back into paying your student loans might seem scary, but by arming yourself with information and a plan you can reduce your anxiety and stress.

For more, watch out for these student loan scams and who is getting refunds from loan scams.