Major Student Loan Servicer To End Contract For Student Loans — Here’s What It Means For Student Loan Cancellation

Major Student Loan Servicer To End Contract For Student Loans — Here’s What It Means For Student Loan Cancellation

This story is growing.

You could also be getting a brand new student loan servicer by the top of this 12 months.

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Here’s what you must know.

Student Loans

There’s a serious announcement at the moment that might impression your student loans starting subsequent 12 months, and it pertains to one of many nation’s main student loan servicers:

  • As first reported by Michael Stratford of Politico, FedLoan Servicing will not renew its 12-year-old contract with the U.S. Department of Education to service federal student loans.
  • FedLoan Servicing, often known as the Pennsylvania Higher Education Assistance Agency (PHEAA), providers student loans for roughly 8.5 million student loan debtors, which represents about 20% of all federal student loan debtors.
  • Importantly, FedLoan Servicing is the only student loan servicer that providers federal student loans for the Public Service Loan Forgiveness program, which helps student loan debtors who work for a certified public service or non-profit employer get student loan cancellation.
  • FedLoan Servicing’s present contract will expire December 14, 2021.
  • Student loan servicers assist student loan debtors handle their student loan funds, reply questions on student loans, and assist with student loan reimbursement.
  • Whether your student loan servicer is FedLoan Servicing or one other student loan servicer, you may nonetheless contact your student loan servicer throughout the Covid-19 pandemic at any time.

What this implies on your student loans

If FedLoan Servicing is your present student loan servicer, then you may anticipate to have a brand new student loan servicer in December. This is especially vital for any student loan borrower who’s pursuing public service loan forgiveness, a program that has been plagued for years with 2% or much less approval charges, which has prevented hundreds of student loan debtors from getting student loan cancellation. Democrats have proposed 5 methods to alter student loan cancellation. The Biden administration is targeted on serving to extra student loan debtors get student loan cancellation underneath current student loan applications, and in addition creating a less complicated and extra clear student loan reimbursement system. This contains extra accountability for student loan servicers and oversight of for-profit faculties, amongst different initiatives. These latest student loan updates have some individuals asking: Is this a sport changer for student loan cancellation? The U.S. Department of Education has not introduced which student loan servicer will take over servicing for current federal student loans. Student loan debtors ought to proceed to make student loan funds, if relevant, within the regular course. Currently, via September 30, 2021, federal student loan funds, together with for the Public Service Loan Forgiveness program, will not be required as a consequence of short-term student loan forbearance. If FedLoan Servicing just isn’t your student loan servicer (which is the case for many student loan debtors), there isn’t a different indication that your present student loan servicer will change.

Although federal student loan funds are paused, there’s no assure that this student loan aid can be prolonged. Therefore, now is an effective time to revisit your student loans and student loan reimbursement technique. Where must you begin? Here are some well-liked choices to economize:


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