Thinking about using a company other than your loan servicer for a loan forgiveness program or loan consolidation? Some companies make big promises and things can quickly turn out as too good to be true. Before making any decisions, check out these important red flags and reminders to remain empowered.
- FEES. Administration fees, registration fees, setup fees, startup fees, processing fees. Official programs are available for FREE by going through your loan servicer. If you don’t know who your servicer is, that’s OK… check here: www.nslds.ed.gov
- Use of political persuasion. If mention is made of Obama/Trump, or a company starts getting political, this is not a good sign. Official programs do not get political.
- Asking for your FSA ID. Do not give your FSA ID to a third-party company. With your ID, a company may act on your behalf on important loan matters. This includes making changes/decisions on your loan that you are responsible for (and may later regret). This access also leaves your personal data vulnerable to identity theft.
- Gift cards or other forms of payment. Official programs will not offer incentives. These “gifts” come at a cost by charging you for what you can accomplish for free.
FORGIVENESS PROGRAM REMINDERS:
- Only federal student loans are eligible for the forgiveness programs below. If you have a private student loan, please do not pay a third-party company to handle your private loans before talking to your current lender and discussing your options.
- Loan Forgiveness programs including: Teacher, Public Loan Service (PSLF) and Income Driven Repayment (IDR) types ALL require payments.
- PSLF requires 120 qualifying payments AND you must be employed full time in government at any level, or a qualifying not-for-profit organization.
- IDR Loan Balance Forgiveness requires 20-25 years of on-time payments while in one of the following qualifying IDR plans: IBR (Income-Based Repayment), ICR (Income-Contingent Repayment), PAYE (Pay As You Earn) and REPAYE (Revised Pay As You Earn).
- For more info and full qualifications for loan forgiveness, discharges and cancellations, please check out our guide:
There are NO FEES when consolidating federal student loans if going through the U.S. Dept. of Education (keeping the loan federal vs private). For more info on consolidations, please check out our full blog post: Student Loan Consolidation