How to Help Borrowers Overcome Challenges to Restarting Repayment
Recently, Federal Student Aid (FSA) released new quarterly portfolio reports outlining updates on federal student aid programs (Source: studentaid.gov). The data signaled some upcoming, serious challenges that federal student loan borrowers may face, furthering unpreparedness for the repayment restart. Here’s a quick look at a few findings, what it means for the average student loan borrower, and how being proactive can help. For the full article, check out our recent blog, Be Proactive Ahead of Repayment Restart.
Borrower Challenges
About 44 million borrowers owe $1.64 trillion in outstanding student loans.
1 million borrowers are not enrolled in a repayment plan and will be placed into the 10-year Standard plan unless they contact their servicer to enroll in a different plan that better fits their situation.
Nearly 10 million borrowers had their loans transferred to different servicers during the repayment pause and may not even know who to contact (Source: cnbc.com).
Uncertainty and confusion around the one-time debt relief program’s fate that’s in the hands of the U.S. Supreme Court, and new income-driven repayment option that has been proposed.
Some student loan servicers have cut back on customer service hours, leaving borrowers concerned about their ability to get the support they need during the repayment process. Another major servicer laid off hundreds of people this year but has maintained customer service hours (Source: CNN).
Congress has appropriated the Federal Student Aid office about $800 million less than the Biden administration requested, adding to concerns about a smooth transition back to repayment (Source: CNN).
Borrower Support
In working with loan servicers, borrowers may experience longer hold times, shorter customer support hours, and delays for paperwork processing. Here are three tips to help borrowers navigate the road ahead.
Locate your student loan servicer, ensure they have your most current contact information and create an online account to better manage your loans.
Use FSA’s Loan Simulator to define eligible repayment plans, payment amounts, etc.
College Scorecard Updates Help Students Find High Value Postsecondary Programs
The U.S. Department of Education's (ED’s) College Scorecard is a free online tool that helps students and educators make informed decisions about which college or university to attend. It provides information on various aspects of higher education, including college costs, student debt, graduation rates, admissions test scores and acceptance rates, student body diversity, post-college earnings, and more. Recently, the Scorecard was updated to include new features to reflect ED’s commitment to promote greater engagement in and awareness of postsecondary outcomes. Updates include:
Data on the median earnings of former graduates, by college, four years after completing their field of study. It allows students to understand which college and university graduates take on less loan debt and which former students earn more after college.
Search options for prospective graduate students on fields of study for all degree levels, schools that offer their field of study, and data on earnings, debt, and the number of students served.
Demographic data on campus and faculty diversity.
Employer's Guide to SLRA Free E-book
Student Loan Repayment Assistance (SLRA) is one of the fastest growing employee benefits to help attract and retain top talent. Check out the 2023 edition of the employer's guide for even more insight and guidance on implementing an SLRA program.
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