Federal student loan borrowers have started receive notices of the Federal Student Aid Office (FSA) of the Department of Education about the significant changes to their direct loans.
If your student loans are managed by one of the many top federal loan managers, you may have received an email informing you that your loans are being transferred to a new loan manager.
Earlier this year, the Pennsylvania Higher Education Assistance Agency (aka FedLoan Servicing), Navient, or Granite State Management & Resources notified the Biden administration of their exit from the federal student loan program. Over the next few months, these lender changes will impact millions of federal borrowers.
Read on to learn more about what to do if your student loan manager changes, such as refinancing a private loan. If you decide to refinance your student debt, visit Credible to compare the interest rates of several private lenders without affecting your credit score.
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Here’s what to know if your student loan officer changes
Ministry of Education student loan service change will not affect your existing terms and conditions, interest rate, loan amount or the amount of the monthly payment. It also will not affect your eligibility for available repayment plans, loan release programs, or loan cancellation programs such as Public Service Loan Forgiveness (PSLF).
During this period, log in to Federal student aid website using your FSA ID to make sure your contact information, such as phone numbers, are up to date. This is also where you can find information about your current loan.
While your loan manager changes, you will remain on the 0% interest payment break for Federal Student Loans. However, the COVID-19 payment suspension ends in January 2021. Starting in February, you will have to repay your student loans on the terms you had before the federal forbearance took effect.
If you’re not ready to resume your student loan payments in February, consider a few options:
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It is important to know that refinancing your federal loans to a private loan will make you ineligible for the current federal forbearance period, as well as other government protections such as income-tested and forgiveness programs. student loan.
Use a student loan refinance calculator to see if this option can help you reduce your monthly payments. You can browse the private student loan rates in the table below and visit Credible to see your estimated interest rate for free.
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How to get better terms on your student loans
As your loans are transferred to a new manager, your repayment plan will remain the same. If you are unhappy with your current student loan rate or other terms, consider refinancing a private student loan with better terms.
Refinancing your student loans at a lower rate can help you lower your monthly payments, pay off debt faster, and save money on your college loan debt over time.
A recent analysis by Credible found that well-qualified borrowers who refinanced on a shorter loan term were able to pay off their student loans 41 months faster and save nearly $ 17,000 in interest charges over the life of the loan. Those who refinanced over a longer loan term saved over $ 250 on their monthly payments, all without adding to the total cost of interest.
To learn more about refinancing private student loans, contact a knowledgeable loan officer at Credible who can help you decide if this option is right for you.
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