What is a student loan officer? | Find the best loan for you
Student loans represent a large and growing share of consumer debt, especially for young borrowers. According to data from the Federal Reserve for the third quarter of 2018, borrowers in the United States owed more than $ 1.5 trillion in student loans.
This mountain of debt is handled by student loan managers – the people who collect monthly loan payments from borrowers and take care of other administrative tasks to maintain loans.
If you have student loans, you need to know who your student loan managers are and what they can and cannot do. Find out how they can go beyond collecting payments and help you manage your loans.
What does a student loan officer do?
Almost 90% of student loans issued in the 2017-18 school year were federal loans from the US Department of Education. The remaining non-federal loans came from states, institutions, and private lenders, such as banks and credit unions.
Private lenders can administer their own student loans. For example, Sallie Mae manages her own loans rather than handing this responsibility over to a foreign service officer, spokesman Rick Castellano said.
But the Department of Education outsources most of the administrative work to student loan managers. In the 2018 federal budget, student loan managers had over $ 800 million in loan service contracts with the ministry.
A student loan manager oversees a loan from the time the borrower enrolls in school, through grace and repayment periods, until the borrower repays the loan, provided that he is not at fault. One of the main functions of student loan managers is to prevent borrowers from defaulting on their loans, according to the National Institute for Post-Secondary Policy.
Can you choose your student loan officer?
You cannot choose your federal student loan manager or your private loan manager. If you have a federal loan, the Department of Education chooses an agent for you. With a private loan, the lender serves the loan or hires an outside company to manage it.
The manager of a federal loan can change during the term of your loan. Always open and read any letters or emails you receive about your loan in case the Education Department notifies you of a transfer to another duty officer, Castellano says.
Christina Randell, president and CEO of My Education Solutions, which helps borrowers eliminate student loan debt, notes that if you consolidate your federal loans, you could end up with a new loan manager.
When a server changes, you usually get multiple notifications, says Mark Kantrowitz, editor and vice president of research at Savingforcollege.com. These include a letter from the old agent before the transfer and a letter from the new agent after the transfer.
Despite a change in manager, your loan terms – including the interest rate and payment period – should stay the same, says Emeka Oguh, founder and CEO of PeopleJoy, a company that allows employers to offer employee student loan repayment benefits.
How do you know who your student loan officer is?
If you have a federal loan, the loan manager should notify you after the Department of Education assigns it to your account. If you have a private loan, your lender will provide you with details about the loan service.
To retrieve information about your federal student loan, including the name of the loan manager, log on to My federal student aid or the National Student Loans Data System, Said Randell. Another option is to check your credit report, which will include the name of your student loan manager after you graduate and start making payments.
StudentLoans.gov, operated by the Department of Education, lists the names, websites, and phone numbers of the student loan managers it does business with. These agents include:
- Great Lakes Educational Loan Services Inc.
- FedLoan Interview (PHEAA)
- HESC / Edfinancial
- Granite Condition (GSM & R)
- OSLA maintenance
What Can a Student Loans Officer Do to Help You?
While borrowers primarily interact with student loan managers about one thing – paying the monthly bill – loan managers can also help if you run into issues. Here’s how.
He can adjust your repayment plan. A standard repayment plan for a federal student loan spans a period of 10 years. However, you may be eligible to extend the repayment period to 25 years, which will result in lower monthly payments but a higher overall cost as you pay more interest.
You may also be eligible for a plan that allows you to make payments based on your income. Monthly payments would increase in proportion to your income.
“Income-based repayment plans should be requested, so borrowers should be proactive in signing up for repayment plans that lower their monthly payments and recertifying those repayment plans each year,” Oguh says.
Some student loan managers have been criticized for failing to support borrowers who apply for income-based repayment programs that help them juggle student loan debt. For example, in 2016, some student loan managers cited by the Consumer Financial Protection Bureau for refusing income-based repayment plan requests that should have been approved.
In Randell’s experience, some student loan borrowers experience inconsistencies and gaps in communication, including not being informed of all of their repayment options. “It becomes the borrower’s responsibility to ask – and often re-ask – about the options available,” says Randell.
Officers can grant a stay or forbearance. If you meet certain requirements, deferral or withholding allows you to temporarily suspend payments or temporarily reduce your monthly payments, according to the Department of Education.
Under a deferment, you may not have to pay the interest that accrues on certain types of federal loans during the deferment period. With some forbearance, you are responsible for paying the accrued interest, regardless of the type of federal loan.
Experts stress the importance of contacting your loan manager for any difficulty you are having that affects your loan repayments, as well as name and address changes.
“For borrowers, it’s far better to talk to their student loan managers than to hope that any problem will go away. Talk on the phone, send emails or even letters, ”says Oguh.
Your managing agent can provide you with information about the loan forgiveness, cancellation, or release. In certain circumstances, you may be eligible for the forgiveness, cancellation or discharge of a federal student loan.
The Department of Education explains that forgiveness, cancellation and discharge mean the same thing – you are no longer required to pay part or all of your loan – but the conditions apply in different situations.
Forgiveness or cancellation usually refers to no longer being required to pay your loan due to public service employment with a government agency, nonprofit group, or school. . When your loan is paid up and you no longer have to make payments, it could be due to total and permanent disability or the school where you received your loan was closed.
Kantrowitz points out that changing your repayment plan; request for adjournment or abstention; or seeking to forgive, cancel or cancel a loan is always free. “If an organization wants to charge you a fee, it’s probably a scam,” he warns. Rather than working with a third party, contact your student loan manager directly to explore these options.
Warning signs that a student loan officer is not providing good service
A 2017 CFPB report found that 71% of all student loan complaints involved student loan managers or lenders. From July 2011 to August 2017, the office received more than 50,700 complaints regarding federal and private student loans. If you have recently been assigned or reassigned a maintenance worker, pay attention to the following red flags:
- The loan manager incorrectly applies or allocates payments multiple times.
- The loan manager loses the documents you filed to reduce the payments.
- The loan manager makes you pay more than you are supposed to pay when you are having trouble making payments.
- The loan manager hides key information about repayment plans, such as the rules for recertifying an income-based payment plan.
- The loan manager’s debt collector regularly harasses your parents and employers about overdue payments.
- The credit manager’s pursuit of a defaulted loan results in the revocation of professional licenses, making debt repayment even more difficult.
What to do if you are unhappy with a student loan officer
If you have a problem with a student loan manager – you’re denied a repayment plan change that should have been approved or your account inquiries are being ignored, for example – there are three things you can take, according to Oguh:
Filing a formal complaint with the CFPB and through federal student assistance channels allows authorities to more effectively respond to your student loan manager issues and can help them identify problematic trends.
Another option is to consolidate or refinance your loans, which may allow you to change your loan manager. With a direct consolidation loan for federal loans, you will choose your consolidation manager. Private student loan refinancing allows you to choose your lender and associate manager. When choosing your repairer, you can read consumer reviews and complaints to find the one that’s right for you.