Grace Period on Student Loan Payment Failures is About to Expire

After over three years of relief, student borrowers were once again required to make payments starting last October. Interest on failure to pay did once again begin accumulating on outstanding amounts last year. However, for the past year, student loan providers were not permitted to report delinquent borrowers to credit agencies for failure to make payments. Similarly, the Department of Education did not garnish wages or report taxpayers to debt collectors for failure to make payments. That relief expires on September 30, 2024. Going forward, student loan debtors should note that significant penalties may apply for failure to make required student loan payments. For more information on the tax treatment of student loan interest, visit Tax Facts Online. Read More: Link to Q8048.