The main role of student loan servicers is to ensure that borrowers repay their loan balance in accordance with the terms of the agreement. They are involved in the process from the moment the loan is taken out until the last payment is made.
Along the way, they provide monthly statements and keep a record of payments applied to the loan balance. If there are any changes, such as switching to a more affordable payment plan, they play an essential role in the process.
There are currently 10 different servicers hired by the government to manage federal student loan recovery. Private student loans It can also be served by one of those companies or it can be handled exclusively by others.
Here are some examples of times when borrowers need to proactively communicate with their servicer in addition to checking the balance.
Graduation. To get the best start toward paying off your student loans, it helps to have a clear understanding of the repayment schedule. Knowing when payments should start, how much will be owed, and how often payments should be made are just some of the areas where it helps to get clarification from a manager.
For federal Stafford loans, the grace period lasts for six months from the date of graduation. At the end of that period, a regular recurring payment schedule will begin. If you have any questions about the amount and your payment options, it helps to have those conversations before the first payment is due.
Resolving disputes. It pays to examine your student loan account information frequently and act quickly when there are questions about the accuracy of what is being reported.
Common borrower concerns are often related to the remaining balance or the payment record. Addressing these concerns with the trustee can help clarify legitimate reasons for what you are seeing on your statement, such as balance increases due to the checkout method. accrual of interest, or your communication could lead to a correction for an incorrectly applied payment.
Credit reporting errors should also be reported to an administrator while they are disputed with the credit reporting agencies.
Minor life changes and short-term setbacks. Whenever there is a change in your contact information, it is vital that you contact your administrator and share those details. Similarly, if you change banks or make other changes that affect your checking or savings account, it is important to let them know if you are enrolled in an automatic payment plan.
It is also important to inform the administrator if you are experiencing any change in employment that requires a temporary suspension of your pay schedule.
This could be in the form of deferral or forbearance in the right circumstances, but it is always recommended to consider the limitations of those options and weigh them against the benefits of other possible solutions. Starting that conversation with an administrator is an important first step.
Major life events that affect loan repayment. Many things can happen in a borrower’s life while paying off a student loan. Research has revealed that the average recipient of a bachelor’s degree takes 21 years to pay off all your student loans. There can be a long list of successes and setbacks throughout that time, and it helps to know how your payment plan can be adapted when necessary.