<body><div>Source: siteRepayment requirements continue, with a focus on easing the <img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=0JyMQJ_0wOzAaQy00" alt="https://img.particlenews.com/image.php?url=0JyMQJ_0wOzAaQy00" width="474" height="474" >transition for borrowers with student debts in default or collections.In a blog post titled “What’s Next as Borrowers Return to Repayment,” the U.S. Department of Education outlined its 2025 requirements for credit reporting and collections on student loans.On Sept. 30, 2024, the department’s 12-month “on ramp” plan—which allowed borrowers to avoid delinquency, credit reporting, default or debt collection—ended.The plan functioned essentially as automatic forbearance, applied by student loan services contracted with the department, though borrowers still received notices for missed payments.The forbearance brought the borrower’s account current, prevented collections and credit reporting, and restarted with each missed payment, ACA International previously reported.Now that the “on ramp” period is over, “the department reports it is required to report late or missing payments for most borrowers to the national credit reporting agencies in January 2025, and their loans will enter default—triggering mandatory collections and other consequences in late 2025,” according to the blog post.January 2025 will be the earliest borrowers might see delinquent payments reported to credit bureaus.“At the same time, we recognize that several evolving court orders have changed the terms of several student loan repayment plans, which affected many borrowers across the country,” the department reports.Borrowers have several options for repayment and managing their loans, outlined by the department in the blog post:<ul><li>Apply for loan forgiveness through the Federal Student Aid (FSA) website.</li><li>Consider changing to an income-driven repayment or sliding scale option on the FSA’s payment website.</li><li>Request forbearance or deferment here.</li><li>Make repayment arrangements, such as loan discharge or consolidation, or complete monthly payments to avoid mandatory collection actions.</li></ul>How Can Servicers Help?ACA members in student loan servicing have successfully helped borrowers develop income-driven repayment programs that work. They also explain the options for consumers who truly cannot afford to pay. In many cases, discussions with servicers can also rectify past financial decisions that were not a consumer’s best option.Student loan servicers are encouraged to communicate with borrowers they had been in touch with before or during the payment pauses and the on-ramp period.Place contact information on your website as well as details about the payment start process.If you have contact with existing borrowers on behalf of clients, according to Student Connections, which works with schools and consumers on student loan payments, you should:<ul><li>Provide consistent and accurate information to borrowers.</li><li>Reinforce the importance of keeping contact information up to date.</li><li>Make sure borrowers are in the right repayment plan.</li></ul>This is especially important given the influx of calls servicers may get during repayment periods.For borrowers with questions, the FSA website has resources that can align with your repayment strategies on behalf of education clients. ACA’s Know My Debt financial literacy website has additional resources.New Student Loan Relief ProposalMeanwhile, the department announced proposed rules to allow loan forgiveness for approximately 8 million borrowers experiencing hardship with their loans, according to a news release.This is a next step in continued efforts to provide student debt relief for borrowers with a hardship that is likely to prevent them from fully repaying the loan, according to the department.“These proposed regulations would reach borrowers with persistent financial burdens that prevent them from repaying their student loans and who do not sufficiently benefit from other currently available forgiveness options,” the department reports. “Such financial burdens could include unexpected medical bills, high child care costs, significant expenses related to caring for loved ones with chronic illnesses, or devastating economic circumstances from the impacts of a natural disaster.”The proposed rules will be available in the Federal Register in the coming weeks and open for public comment for 30 days.</div></body>

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Department Of Education Announces 2025 Credit Reporting Steps For Student Loans

Repayment requirements continue, with a focus on easing the. transition for borrowers with student debts in default or collections. In a blog post titled “What’s Next as Borrowers Return to Repayment,” the U.S. Department of Education outlined its 2025 requirements for credit reporting and collections on student loans.