Student loan service Navient has extended its federal contract with the Department of Education to 2023, despite previously Announcement on 28 September Her intention to get out of the federal student loan business.
NS contract renewal Posted on SAM.gov, a website that hosts data about government contracts.
According to the renewal document, the two-year contract extension comes with a $391 million price tag. Navient will be responsible for “management of student support obligations, servicing, special programs, and consolidation of outstanding debt including, but not limited to” until September 14, 2023.
NS 6 million student loan borrowers whose federal debt is serviced by Navient will eventually be transferred to a new servicer, Maximus, subject to the approval of the Department of Education, Navient said prior to the renewal of his contract. But Navient isn’t the only student loan company planning to terminate its federal contract.
two other loan servants, FedLoan Servicing and Granite State Management and Resources, announced in July that they were not renewing their federal contracts that expire at the end of the year, in a move that would affect 10 million borrowers.
The Office of Federal Student Aid (FSA) is working to reduce confusion Because millions of borrowers are transferred to a new loan servicer around the same time federal student loan payments are scheduled to resume in a matter of months.
FSA Chief Operating Officer Richard Cordrey said in a statement that “FSA will provide robust oversight and authorities to ensure that borrowers are supported and not harmed during this transition.” will be held accountable.”
If you are one of the 16 million student loan borrowers who Federal Loan Navient . are serviced by, FedLoan Servicing or Granite State Management, your loans will be automatically reassigned to a new servicer. Your student loan repayment terms – including interest rate, payment date and loan amount – will remain the same.
Keep reading for tips on how you can prepare for the upcoming transition. Plus, learn what you can do if you’re not happy with your current federal student loan repayment terms, such as student loan refinancing. You can do this Compare Student Loan Refinance Rates Without affecting your credit score on Credible.
3 Things To Do Now If Your Student Loan Servicer Is Changing
If your student loan servicer is closing, you don’t need to take any action. The Department of Education will handle the transition to a new servicer, and your loans will be automatically reassigned. Still, there are some things you can do to prepare now, especially such as COVID-19 payment freeze – which runs until January 2022 – ends with:
- Make sure your contact information is up-to-date on the FSA website. That way, you don’t miss any important communication about your new loan servicer.
- See if you are enrolled in automatic payments. If you have set up autopay for your federal student loans, your next student loan payment will be deducted from your account in February 2022.
- Review your current student loan repayment terms. Take a look at your interest rate, loan amount and monthly payment so you can Start planning your loan payments.
By getting your information in order now, when your server changes and your payments resume, you can expect a smooth transition.
What to do if you are not happy with your student loan repayment plan
When your loans are assigned to a new student loan servicer and the federal administrative forbearance period expires, you will be responsible for repaying your student loans with the same repayment terms that you previously had. Your monthly payment, interest rate and loan amount will remain unchanged.
But if you are not happy with your previous loan repayment plan, you have options. reduce your monthly payment And pay off your loans faster. This way.
Refinance at lower interest rate
private student loan refinance When you take out a new student loan with better terms to pay off your current loans. By Refinance at lower interest rateWith this, you may be able to lower your monthly student loan payment or pay off your loan faster.
student loan borrower Refinance for a short term loan According to a reliable analysis, OnCredible was able to save an average of about $17,000 and pay off their loans 41 months faster. those who refinance for long term loan Were able to cut their monthly payments by an average of more than $250, without adding to the total interest paid.
While private student loan refinancing may enable you to get a lower rate on your student loan debt, it is important to note that Refinancing Your Federal Student Loans Will make you ineligible for certain resources like income-driven repayment and student loan forgiveness programs.
You can browse student loan refinance rates in the table below, and View your estimated rate By getting pre-qualified on credible. Once you have a good idea of the rates you qualify for, a . use student loan calculator To see if refinancing is right for you.
Enroll in an income-driven repayment plan
The federal government offers some debt relief options for borrowers who are struggling to pay off their student loans, including income-driven repayment (IDR). IDR plans limit your monthly student loan payments to 10-20% of your disposable income, depending on the type of loan you have.
You can enroll by signing in to your account on the FSA website.
Apply for additional federal forbearance
The COVID-19 administrative tolerance period was extended to the end of January 2022, but many borrowers say they Will be unable to resume payments. If This Sounds Like You, Consider Applying avoid financial hardship Or unemployment moratorium. Pending FSA approval, you may be eligible to hold your student loan payments for an additional 36 months.
To learn more about student loan repayment options, contact a loan officer At Credible who has a deep understanding of the needs of student borrowers.
You have questions related to finance, but don’t know what to ask? Email a trusted money specialist [email protected] And your question can be answered by credible in our Money Expert column.