ICFE eNEWS #15-15 - May 29th 2015
Beware! You Don't Have to Pay for Help with Your Student Loans
There are countless ads online from companies offering to help you
manage your student loan debt…for a fee, of course. But, did you know
that you can get help with your student loans for free?
If you're a federal student loan borrower, the U.S. Department of
Education provides free assistance to help:
Lower Your Monthly Payment;
Consolidate Your Loans;
See If You Qualify For Loan Forgiveness; and
Get Out of Default
Lower Your Monthly Payment
Are you out of a job or not earning very much? The federal government
makes it easy for you to switch to a more affordable repayment plan at
any time at no cost.
Your loan servicer – the company that collects your payments, responds
to your customer service inquiries, and does other tasks related to your
federal student loan – can help you decide which repayment plan best
suits you. Click here for a list of servicers' contact information and
to find out how to look up your servicer.
Before you contact your servicer, check out the Repayment Estimator to
get an idea of plans that may be available to you and to see estimates
for your monthly payments.
Consolidate Your Loans
If you have multiple loans that you want to combine, you can apply for
loan consolidation through StudentLoans.gov. The application is free,
and there are no extra processing fees.
Some people find it simpler to group all their student loans into a
single loan with one interest rate and one monthly payment. If you
choose to consolidate your federal student loans with the U.S.
Department of Education, you, too, may be able to take advantage of
flexible repayment plans, including ones that base your payments on your
income and family size.
See If You Qualify For Loan Forgiveness
Loan forgiveness is the process by which a borrower is released from
their obligation to repay all or a portion of the principal and interest
on a student loan. This also is known as discharge or cancellation. Loan
forgiveness programs were created to encourage people to take certain
types of jobs, to help borrowers with lower income jobs, and to
compensate for permanent disabilities.
Many student loan companies advertise that they can help you get your
loans forgiven. And sometimes, they simply are using the Department of
Education's free resources to help you, but are charging you to do
In fact, your loan servicer can help you determine if you qualify for
loan forgiveness... for free.
Get Out of Default
If your loan is already in default, the debt relief companies know it
and may target you with online and mobile ads, phone calls, and maybe
even letters to your home address. By being in default, you've already
incurred added interest, and you're subject to collection fees. There's
no reason to add additional fees by signing up with a debt relief
Even if your loan is in default, loan consolidation is free and so is
getting on a loan rehabilitation plan. Find out how to get out of
Protecting Your Log-In and Account Information
When student loan debt relief companies offer to manage your loan
account, to do so, they will ask you to provide them with your federal
student aid log-in information, or sign a Power of Attorney. Think about
it: your log-in information is the equivalent of your signature on
documents related to your student loan. If you share this information or
sign a Power of Attorney, you are giving that person the power,
literally, to take actions on your student loan on your behalf.
And if the debt relief company collects fees from you, but never
actually makes any payments on your loan for you, you still will be
responsible for those outstanding payments and late fees. You should
protect your federal student aid log-in and account information as
securely as you guard your ATM PIN.
Do You Think You've Been Scammed or Need a Resolution?
If you've already signed a contract with a debt relief company, and you
think they have cheated you, call the Consumer Financial Protection
Bureau (CFPB) at 1-855-411-2372, or submit a complaint online. Under
"What type of service is your complaint about?" select Debt Settlement.
Then, choose I have a problem with a company that I hired to help reduce
or settle my debt.
Also, many state governments have an Office of Consumer Affairs or
Consumer Protection either within or affiliated with the office of the
state's Attorney General.
If you've tried to work out your student loan debt issues with your
servicer without success, you can contact the Federal Student Aid
Ombudsman Group, which helps resolve disputes related to Direct Loans,
Federal Family Education Loan (FFEL) Program loans, Guaranteed Student
Loans, and Perkins Loans.
Remember, there are no student loan companies affiliated with the
Department of Education that charge fees to help you manage your loan
repayment. With the resources available to you through the Department of
Education, you can successfully manage your loan repayment for free.
Author April Jordan is a senior communications specialist at Federal Student
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