The expiration of the Biden administration’s student loan initiatives, an on-ramp period and FreshStart, on Sept. 30 and Oct. 2, respectively, reintroduced regular consequences for borrowers who miss monthly loan payments.
The on-ramp period was implemented to alleviate the effects of missed loan payments for student borrowers during a temporary 12-month period. This initiative followed the struggle to resume monthly payments many borrowers faced at the end of the COVID-19 payment pause. During the program, financially vulnerable graduates who missed payments were not reported negatively to credit bureaus or referred to debt collection agencies as they normally would be.
The FreshStart initiative similarly helped students behind on loans get out of default. Eligible borrowers qualified for various benefits throughout the program, including credit reporting changes to help them apply for new loans and prevent damage to credit scores.
Now that these initiatives are over, borrowers will face the normal consequences of missed loan payments, including withheld salary from employers, negative reporting to credit bureaus and the immediate demand for repayment of a loan.
Human biology junior Genna Adelizzi took out loans to pursue her bachelor’s degree and has watched videos online of borrowers who have pursued similar career paths. Adelizzi used Texas One Stop for information on allocating her money and referred to Federal Student Aid resources in preparation for repayment.
“Whenever you pull out a student loan, you are accepting the financial responsibility and accountability for paying those back,” Adelizzi said. “I think the punishments are pretty fair for missing the payment.”
A University spokesperson said in an email that initiatives like the Housing Affordability Scholarship and a 28% drop in net tuition over the last five years have worked to decrease the amount UT students have to borrow.
Less than 37% of UT Austin students graduated with loans in 2023, according to data from UT Systems. The average debt at graduation was $20,555.
UT alumnus Benson Kumenda, who graduated in 2022 with a health science degree, is saving up for post-graduate school loan repayment and hopes to utilize programs from his employer to make sure he doesn’t miss payment each month.
“Your credit score is basically your life,” Kumenda said. “I feel like (missed payment consequences) can be a little too stringent, especially if it’s for students who don’t have enough information … on paying off their student loans.”
