Maximus' Aidvantage to take over Navient's student loan servicing
The U.S. Department of Education (ED) approved Navient’s request to transfer their 5.6 million federal student loan servicing accounts to Maximus and their federal servicing division named Aidvantage. While preliminary news about the transfer only mentioned Maximus, borrowers should be on the look-out for communications from Aidvantage to keep updated on the status of the transfer. Aidvantage will begin servicing Navient's student loan portfolio this winter. Once the transfer to Aidvantage is official, Aidvantage will send borrowers a welcome letter with their loan details.
Q&A provides important awareness of PSLF
Our recent blog post highlights the actions ED is taking to improve the Public Service Loan Forgiveness (PSLF) program. A recent SmartSessions® training session on PSLF provided an opportunity for attendees to ask questions. We’ve captured common questions and answers from the session to help shed important light on the PSLF program.
Should borrowers apply for PSLF now, even though a loan servicer change is coming? Yes, apply now. The new servicer will take over all of the program processing and borrower communications from the previous servicer. The sooner borrowers get started in the program, the sooner they’ll fulfill the 10-year requirement.
How do borrowers find out if their employer is recognized as a qualified employer? In the PSLF Help Tool, borrowers enter their employer’s tax ID and, for the most part, it will immediately advise if it’s a qualified employer. However, some employers may not have a tax ID to identify them as tax-exempt, but they may qualify (e.g., law enforcement, health services, etc.). In that case, the employer can certify they're a qualifying employer on the application.
Is the loan amount that will be forgiven considered taxable income? The regulations are very clear that borrowers will not be taxed on amounts forgiven under PSLF, unlike some other programs where forgiven amounts are taxed.
With the new PSLF waiver, how far back will past borrower payments, previously identified as ineligible, now be applied? Past borrower payments can now be applied back to the beginning of the program on Oct. 1, 2007.
Do federal Perkins and Federal Family Education Loan (FFEL) program loans count in the new waiver? Yes, as long as they’re consolidated into a Direct consolidation loan. The only FFEL loans that don’t qualify for the waiver are parent PLUS. However, they are eligible for PSLF and Temporary Expanded PSLF (TEPSLF) if consolidated into a Direct consolidation loan. They’re just not eligible for the waiver (i.e., past payments cannot be counted).
Surveyed parent PLUS borrower insights
According to the American Association of Retired Persons, there are 8.4 million student loan borrowers over age 50 — roughly 22% of the total number of student loan borrowers. Our recent blog post shared six facts to know about parent PLUS loans. Relatedly, a Harris poll done on behalf of Nerd Wallet in July 2021 shared seven interesting insights from federal parent PLUS borrowers, including:
30% wish they had asked their kids to come up with a different plan that didn’t rely on the parents taking out loans to help pay for their kids’ education.
27% wished they’d taken out a smaller parent PLUS loan amount.
22% thought their kids would take over the parent PLUS loan payments but haven’t.
20% could initially afford their monthly payments but no longer can.
26% won’t retire as originally expected, due to the burden of parent PLUS loans.
24% will request a forbearance after the Coronavirus Aid, Relief, and Economic Security (CARES) Act automatic payment suspension ends.
28% are counting on widespread student loan debt forgiveness from the Biden Administration.
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