There have been a number of changes in the federal student loan world recently, so we want to make sure you’re up to date on what these changes mean for you.
As of this posting, the freeze on federal student loan payments and interest accrual is set to expire on January 31, 2021. That means on February 1, monthly payments and interest rates will resume to what they were before the pandemic relief began.
For an already-disorganized system, this resumption of payments has the potential cause a bit of chaos. Don’t panic, just be prepared. Here’s what you can do:
- Verify your contact information that is on file with your loan servicer (address, email, phone number). Make sure they’ll be able to get in touch with you if they need to communicate any changes or updates.
- If your payments were on auto-debit, don’t assume that will automatically start back up in February. Double check that your payment has been debited, and if it hasn’t then manually make your February payment and set up auto debit again.
- If you’re on an income driven repayment plan, you need to certify your household size and income annually. This certification process has been on hold during the pandemic and you should be receiving communication from your servicer when it’s time to do this again. It might be worth doing this sooner if your income has gone down and/or your family size has grown.
- If you run into issues making payments or recertifying your income, you may need to contact your loan servicer directly. Be prepared for longer wait times, and make sure you know what you’re asking for when you make the call. Servicers tend to take whatever action gets you off the phone the fastest, which isn’t always the action that’s best for you. Consider talking with us before you call.
And because it’s never simple in this arena, FedLoan Servicing will not be renewing their contract with the Department of Education and will let it expire at the end of this year. FedLoan is the largest servicer of federal student loans, and the only servicer that manages the Public Service Loan Forgiveness (PSLF) program.
If you’ve submitted the employer certification form in order to track payments toward PSLF, then FedLoan is your current servicer and your loans will be handed off to a new servicer starting in 2021. [Note that even if you are not working toward PSLF, FedLoan may still be your servicer and you will also be getting a new loan servicer in the new year.] Because the PSLF program is already so complex and it will likely take some time to iron out a process with a new servicer, it is in your best interest to get together as much documentation as you can regarding your payment history and number of qualifying payments made.
All of this is enough to scramble even my brain, so if you would like to talk more about what these changes mean for you, don’t hesitate to set up a call with me using this link.
You can also find more information on the Federal Student Aid website.