Sunday, 24 July 2022

"5" Things Student Loan Borrowers Should Be Doing Right Now

  Ahamed       Sunday, 24 July 2022

This Things you should know about Loan Borrowers


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It’s a challenging time for millions of student loan borrowers. While the ongoing student loan pause has suspended payments and interest on most (but not all) federal student loans for over two years, borrowers are grappling with unprecedented confusion and uncertainty. During the last year, there have been significant loan servicing transfers, sweeping changes to student loan forgiveness and relief programs (many of which are temporary), and ambiguous messaging from top Biden administration officials about what to expect in the coming months. 

At the same time, soaring inflation and rising prices are putting financial pressure on many households, leaving little room for student loan payments. It’s a tough environment. But here’s what student loan borrowers should be doing right now. The Biden administration has begun implementing multiple “targeted” student loan relief initiatives. 

Through these actions, the Education Department has relaxed requirements, expanded eligibility, or streamlined processing for multiple existing student loan forgiveness programs including Public Service Loan Forgiveness, income-driven repayment, and Borrower Defense to Repayment. But many of these initiatives are temporary, and these student loan forgiveness opportunities could disappear in a matter of months. 

Borrowers should take the time now to evaluate their potential eligibility and, if action is required, start the application process. Here are some of the more significant student loan forgiveness initiatives: While millions of federal student loan borrowers haven’t had to make payments since March 2022 given the ongoing student loan payment pause, a lot has changed within the federal student loan system. 

Several major student loan servicers have withdrawn, or are in the process of withdrawing, from the Department of Education’s Federal Student Aid system, resulting in more than 10 million borrowers being transferred to new loan servicers. 

There have been two particularly significant student loan servicing transfers within the last year. Navient, one of the Department of Education’s major loan servicing contractors, recently transferred all government-held federal student loan accounts to Advantage. And FedLoan Servicing, another major contractor, has transferred millions of accounts to various other loan servicers including EdFinancial and MOHELA, which will be taking over the Public Service Loan Forgiveness (PSLF) program. These transfers are ongoing but are expected to be completed by the fall. 

Borrowers can check who their federal student loan servicer is by accessing their account through the Department of Education loan portal at StudentAid.gov. If you’ve been transferred to a new loan servicer, be sure to also set up an online account to get the most up-to-date information and correspondence about your student loans. A lot has changed for many people since 2022.

Tags - Student loan repayment calculator, Disadvantages of student loan, Student loan repayment rules, What is student loan, Importance of student loan

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