Student Loan Repayment | eastsidealumni

FEDERAL LOAN REPAYMENT INFORMATION

What you need to know.

Context

What's changing and why it matters.

On May 5th, the Department of Education began collecting on student loans in default. While many borrowers’ loan accounts have been in deferment or forbearance through the end of the Biden Administration, borrowers are now required to pay back their loans. There has been an increase in consequences for late payments and accounts in default.

Since loan types, servicers, balances and repayment plans vary across borrowers, it is important that each borrower understands their unique situation and needs. Find more information about understanding your loan status below.

Check Your Loan Status

If you have loans, you should check the status of your loans by following the steps below.

Log into your StudentAid.gov account

Log into your studentaid.gov account (same site and account used to submit FAFSA) and review your dashboard to see a summary of your loan balance and loan servicer(s).

Make sure your email, phone number, and mailing address are up to date. Loan servicers rely on the contact information associated with your StudentAid.gov account to communicate with you.

If you have an existing account, but cannot login, follow these steps to Recover Your Account. You cannot create a new account because there is only one account per social security number.

Log into your loan servicer account(s)

Create an account or log into your existing account with your loan servicer(s).

Many borrowers have experienced one or more transfers of loan servicers, which has made staying up to date on loan servicer and loan information difficult.
Make sure you are aware of all active loans and know your current loan servicer and make sure they have your current contact information including your email, phone number, and mailing address.
- For example, students who borrowed Perkins loans may have more than one loan servicer.
Once you confirm your current loan servicer(s), do a deep dive into what your loan servicer(s) is reporting as your balance.
Confirm your repayment terms including when your repayment begins and your minimum monthly balance.
Confirm your payment is being applied to ALL of your loans. Sometimes payments are set up to only cover some loans but not all loans.
If you have a Perkins loan, confirm your servicer and payment plan as the Perkins loan is often managed by a different servicer.
Download all of your loan information and payment history for your records. With the frequent shifts in loan servicers, you want to be sure all of your balances and payments have been accurately reported.
Call your loan servicer with any questions or issues.

Understanding Your Loan Status

Understanding your loan status can help you take control and avoid penalties.

Loans in Default

Default is failure to repay a loan according to the terms agreed to in the promissory note. In other words, you have not made a payment by the due date. Once a loan is delinquent for more than 90 days your loan servicer will report this status to the credit bureaus. Your loan may be in default if you haven’t made a required payment in more than 270 days.

Contact the Debt Resolution Group to strategize how to get out of default.

Learn more about your options from The Institute of Student Loan Advisors (TISLA). You can email TISLA with your specific situation and questions.

Consequences of Having Loans in Default

The federal government is increasing the consequences for being in default.

How can this impact you?

Borrowers in default have reported drops in their credit scores.
For some borrowers, federal tax refunds and Social Security benefits are being withheld.
There is a threat of wage garnishment. While this is not yet in effect, there are plans to seize wages for borrowers in default.

Loans in Forbearance

A forbearance allows you to temporarily stop making your monthly student loan payments or temporarily make smaller payments.

Confirm with your servicer that you are correctly in forbearance and you won’t be subject to any negative collection activity.

You could be in forbearance because:

You are waiting for your servicer to process a pending Income Driven Repayment plan (IDR). Or,
Your IDR plan is on hold because of the recent SAVE court ruling.

If You Are Struggling to Pay

If you’re not in default, but making monthly payments is a financial hardship, Deferment or Forbearance could be an option to pause payments. Please review your loan servicer's eligibility requirements and application process.

Direct Loan Consolidation allows you to combine one or more federal education loans into a new Direct Consolidation Loan for the purpose of lowering your monthly payment amount. While this option lowers your monthly payment, you may have a higher interest rate on all of your debt and end up paying more overall.

If you have a complaint against your loan servicer or concern about their practices, contact your State Ombudsman Office.

Find Affordable Repayment Options

If you're seeking affordable repayment options, please review the following links.

The Education Department's Loan Simulator

The Education Department’s Loan Simulator can help you figure out which option is best for you.

Income Driven Repayment

You can opt for an Income Driven Repayment plan via Studentaid.gov/idr. Income-driven plans can lower your payments by tying them to your income level and household size. Learn more about the current status of IDR plans.

Income Based Repayment (I.B.R). Monthly payments that are generally equal to 15% (10% if you are a new borrower on or after July 1, 2014) of your discretionary income, divided by 12
Pay as You Earn (PAYE). Monthly payments are 10 percent of discretionary income for 20 years, at which time any remaining balance is forgiven
Income-Contingent Repayment (I.C.R.) Monthly payments are 20 percent of discretionary income for 25 years, after which any remaining debt is forgiven.