According to GadCapital, Student Loan Repayment Will Change In 2022
On January 31, 2022, the gov’t student loan payment hold ends. The Biden administration has yet to announce plans to extend student debt relief despite repeated requests. As a consequence, millions of debtors will resume paying in February.
For many student loan debtors, payments in 2022 may look quite different than before the payment suspension. What you should know
Student Loan Repayment Simplified by Biden Order
This week, he issued an executive order urging multiple government departments to simplify customer service. That order covers the DOE’s student loan system. A new gov’t student loan repayment system will be implemented as part of this program, a “single repayment interface on StudentAid.gov” for debtors.
Borrowers will be able to “apply for, repay, and manage their loans without having to visit several websites or handle various sets of credentials,” according to the Department of Education. Employers may examine their employee benefits and apply for income-driven repayment plans and Direct consolidation loans at StudentAid.gov. With the new capabilities, all Direct student loan borrowers will have access to and repay their loans via a single site, independent of their loan servicer.
“We are sensitive to the needs of those we serve – children, educators, parents, families, and communities,” stated US Education Secretary Miguel Cardona. Affordability and achievement in higher education added Cardona.”
It has been working on this uniform gov’t student loan site for years but has not set a particular date.
Self-Reporting For IBR Plans
This will allow borrowers to quickly apply for or renew income-driven repayment plans (IDR). IDR is a group of repayment programs that connect monthly payments to borrower income and family size. Fees are usually updated yearly to reflect the borrower’s income or family size changes. Borrowers must generally provide their most recent federal tax return or other evidence of payment such as a pay stub or a letter from their employer. But the Department said it will give debtors greater leeway until at least the first half of 2022. The Department stated in bulk emails that you may self-report your income today if all your loans are Direct Loans. Get an IDR plan immediately to get your payments back on track.
Self-reporting allows borrowers to self-certify their income without providing extra proof (although they still can do that). Self-reporting will simplify borrower’s access to IDR and minimize administrative strain on gov’t student loan servicers once the payment hold expires in January.
Changes in Student Loan Servicing
While the Biden administration hopes to move most Direct gov’t student loan repayment activities to the StudentAid.gov website, borrowers will still have to deal with loan servicers when payback starts in February. And in the recent year, numerous servicers have announced their exit from the Department’s loan servicing system:
A new Direct loan servicing arm of Maximus, an existing Department of Education contractor, is taking over Navient’s government-held gov’t student loan.
FedLoan Servicing, which presently administers the Public Service Loan Forgiveness program, will also be closing. Some FedLoan accounts have already been moved to MOHELA. Also, the agency just renewed its contract with the Department of Education for another year (it had been set to expire this month).
For two years, the Department has extended service contracts with Great Lakes Higher Education, Edfinancial, MOHELA, and Nelnet.
Borrowers should visit StudentAid.gov for updated loan servicer information and confirm auto-debit arrangements if appropriate.
Borrowers must generally provide their most recent federal tax return or other evidence of income such as a pay stub or a letter from their employer. But the Department said it will give debtors greater leeway until at least the first half of 2022. The Department stated in bulk emails that you may self-report your income today if all your loans are Direct Loans. Get an IDR plan immediately to get your payments back on track.
Self-reporting allows borrowers to self-certify their income without providing extra proof (although they still can do that). Self-reporting will simplify borrower’s access to IDR and minimize administrative strain on gov’t student loan servicers once the payment hold expires in January.
Changes in Student Loan Servicing
While the Biden administration hopes to move most Direct gov’t student loan repayment activities to the StudentAid.gov website, borrowers will still have to deal with loan servicers when payback starts in February. And in the recent year, numerous servicers have announced their exit from the Department’s loan servicing system:
- A new Direct loan servicing arm of Maximus, an existing Department of Education contractor, is taking over Navient’s government-heldgov’t student loan.
- FedLoan Servicing, which presently administers the Public Service Loan Forgiveness program, will also be closing. Some FedLoan accounts have already been moved to MOHELA. Also, the agency just renewed its contract with the Department of Education for another year (it had been set to expire this month).
- For two years, the Department has extended service contracts with Great Lakes Higher Education, Edfinancial, MOHELA, and Nelnet.
Borrowers should visit StudentAid.gov for updated loan servicer information and confirm auto-debit arrangements if appropriate.