Resources, FAQs & News
Navigating the world of student loan repayment can be a complex and sometimes overwhelming journey. Whether you're a current borrower seeking guidance on repayment or simply looking for the latest updates in the realm of student loan policies and relief measures, you've come to the right place.
At VantageScore, we're dedicated to providing you with a comprehensive and user-friendly platform to help you navigate all your student loan repayment related needs. Our mission is to empower you with the knowledge and resources that will help you make informed decisions about your education and financial future.
VantageScore has always provided educational resources to help consumers maintain a healthy credit file and credit score.
Consumers with federal student loans face a complex and fast changing environment. VantageScore partnered with Dan Currell (of the Digital Commerce Alliance) to bring these consumers clarity so they can maintain their creditworthiness as they navigate the best option for their financial situation.
We understand that managing federal student loan repayment requires careful planning and thoughtful strategies. Our educational resources include links to loan servicer websites, budgeting tips, information on loan forgiveness programs, and educational materials to enhance your financial literacy.
Curious about the basics of federal student loan repayment programs? Wondering when you'll need to start repaying and what types of payment plans are available? Our FAQ section covers common questions and more, offering clear and concise answers to help demystify the world of student borrowing.
The Department of Education (ED) still might be able to forgive loans on the basis of the Higher Education Act. An ED official explains what they hope to accomplish in this video.
Some people were eligible for loan forgiveness under Public Service Loan Forgiveness (PSLF) or the Borrower Defense rule but had not had their loans forgiven yet. The administration has reassessed these programs and some borrowers have had part, or all, of their loans forgiven. (Biden-Harris Administration to Provide Borrowers with Loan Forgiveness as Result of Fixes to Income Income-Driven Repayment Plans)
In June of 2023, the Supreme Court made its ruling on student debt relief, blocking the Biden-Harris Student Loan Debt Relief Plan that would have provided up to $10,000 (and up to $20,000 for Pell Grant recipients) in loan forgiveness for each federal student loan borrower whose individual income was below $125,000 or household income was below $250,000.
The Biden administration has announced three actions on student debt relief and loan repayment after the Supreme Court decision:
The Department of Education has a loan simulator to help you calculate student loan payments and compare different repayment options.
Start by reading the Federal Student Aid’s guide to preparing for loan repayment. Your payment will go through a loan servicer. To find out who your servicer is, log in to your Federal Student Aid account. You can also call the Federal Student Aid Information Center at 1-800-433-3243. Loan servicers should contact borrowers before student loan payments resume in September-October.
Your payments are likely to be the same as before unless you’ve taken steps to change them, such as enrolling in an income-driven repayment plan. You can log in to your Federal Student Aid account to find out what your payment will be.
Interest on federal student loans will begin to accrue again on September 1, 2023. Loan payments will resume in October, 2023.
Most borrowers have a series of different loans disbursed at different times, often at different interest rates. Consolidation loans allow borrowers to combine one or more federal education loans into a single loan with a single payment.
The Extended Repayment Plan allows borrowers to extend their repayment, for example, from ten years to twenty.
The Department of Education has a loan simulator to compare repayment options. However, Parent PLUS borrowers must use Income-Contingent Repayment, described in the “Parent Borrowers*” section below.
Choosing the right plan is very important, as the wrong choice can cost thousands of dollars and years of lost credit towards forgiveness. As with so many areas of student loans, there’s no substitute for reading the fine print.
Existing Income-Driven Repayment options are described at this link, they include:
Borrowers currently enrolled in REPAYE will automatically be enrolled in SAVE, but borrowers in other IDR plans will need to login and request enrollment in SAVE if they are eligible.
An income-driven repayment plan sets your monthly student loan payment to a percentage of your discretionary income. The amount is intended to be affordable based on your income and family size. This increases the amount of time it takes to pay off the loan. However, some IDR programs – particularly the SAVE plan – allow unpaid balances to be forgiven after a period of years in which the plan’s payment requirements are met.
There are two main options for qualified borrowers: deferment and forbearance. In deferment, accumulated interest is added to the loan principal, or “capitalized.” Forbearance is like deferment, but the interest does not capitalize. Forbearance can be slightly better for borrowers, but it’s only available under certain circumstances.
The Department of Education created the Fresh Start program to enable defaulted borrowers to restore their repayment status and have access to other federal student aid benefits and protections restored. The Fresh Start program is expected to have a positive impact on defaulted borrowers’ credit scores.
In most cases, your student loans will still be due. For over 30 years it has been all but impossible to have them discharged or forgiven in bankruptcy. Late in 2022, the Biden administration announced an effort to make it more feasible to have student loans discharged in bankruptcy. As of September 2023, the law hasn’t changed, so it still won’t be easy to get rid of student loans in bankruptcy.
Your payment is delinquent when it arrives one or more days past its due date. Delinquencies of 90 days or more are generally reported to the three credit bureaus (Equifax, TransUnion and Experian), which hold the data used by FICO and VantageScore to calculate your credit score. That said, the Department of Education plans to implement a 12-month “on-ramp” to repayment during which delinquent payments will not be reported to credit bureaus.
Student loans are generally in default after nine months of non-payment. Default is very harmful – the full balance of principal and interest is immediately due (this is called “acceleration”); the default is reported to credit bureaus and hurts the borrower’s credit score; the borrower loses eligibility for deferment and forbearance; the borrower loses eligibility for further federal student aid; and the borrower may experience tax and wage garnishment and legal collection actions.
To the extent that paying off your student loan lowers your total debt, paying off your student debt in full can have positive impacts on your credit score.
Yes, student loan debt does affect your VantageScore credit score. The loan is factored in a number of ways including your overall total debt, and your payment history. Consistent, on-time payments can actually help your score increase while missing payments can have negative impacts on your credit score. As you pay down your student loan, your total debt declines, and you are likely to see your score improve.
Federal student loans charge an origination fee. As of 2023:
Interest rates for new loans range from 5.50% to 8.05% in 2023-24.
According to the Federal Student Aid 2023-24 Handbook:
Private loans are market-driven, so how much you can borrow and on what terms is up to the lender.
Graduate students can borrow up to $20,500 per year in direct loans up to a total of $138,500 including undergraduate debt.
Additionally, you can borrow up to the school’s Cost of Attendance with a Direct PLUS loan.
Parent borrowing is unlimited and not means-tested, under the Direct PLUS program. However, the loan cannot exceed the school’s Cost of Attendance minus existing financial aid. In 2023-24, PLUS loans have a 4% origination fee and an 8.05% fixed annual interest rate.
Parent PLUS loans are not eligible for income-driven repayment plans, as explained by the Department of Education here. A parent borrower may be eligible for income-contingent repayment (ICR) and potentially Public Service Loan Forgiveness (PSLF) after the PLUS loan has been consolidated into a Direct Loan.
Yes, federal loans of this kind are called Parent Loan for Undergraduate Students, or PLUS loans. There are also private loan options for parents, and some states have parent loans.
Maybe. Here are a few of the possibilities:
A loan servicer is a company assigned by the Department of Education to handle the billing and other services on federal student loans, such as income-driven repayment plans and loan consolidation. People sometimes refer to servicers as lenders, but that’s usually wrong: the government is the lender, and the servicer is collecting payments on the government’s behalf.
Loan entrance counseling ensures you understand the terms and conditions of your loan, including your rights and responsibilities. All federal student loan borrowers must complete loan counseling to inform them about how their loans work.
FAFSA is the main form students and families fill out to apply for federal student loans and grants.