Quick Guide to Restarting Your Student Loan Payments
If you are confused about restarting student loan payments, you are NOT alone!
Champion’s Student Success Mentors have taken many calls from frustrated borrowers who:
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- Can’t find student loan payment answers.
- Are upset because of the ridiculous hold times with loan servicers.
- Are confused because they don’t know what to believe.
Not to worry! Those borrowers have inspired us to write a quick guide to give you the reliable information you need to restart your payments!
Let’s get started!
The Debt Ceiling Deal, passed by Congress on June 2, 2023, eliminated any further chance of extending the payment pause.
STEP 1: Get Clear on Facts versus Speculation
Three and a half years of speculation about student loans has caused great confusion. We hear from borrowers all the time who wonder what to believe and need clear direction on how to approach repayment.
Speculation about future student loan forgiveness programs, free education, and new repayment plans are still in the news. What you should be aware of is that it’s only ideas and talk about what might happen. When you hear or read speculation from “experts,” just understand that it is only pundits and politicians floating ideas that may or may not happen.
To gain clarity, read the following 8 facts about the payment restart containing the most critical information you need to know.
FACT #1
NO STUDENT LOAN FORGIVENESS
The Supreme Court blocked the Biden administration’s student loan forgiveness program.
FACT #2
THE PAYMENT PAUSE HAS ENDED
The 3 1/2 year pause on student loan payments officially ends in September 2023.
FACT #3
INTEREST ACCRUAL BEGINS
Interest on student loans will start to accrue on September 1, 2023.
FACT #4
LOAN PAYMENTS ARE DUE IN OCTOBER
Student loan payments will be due in October 2023, and you must set up all automated payments even if these were set up prior to the payment pause.
FACT #5
CHECK YOUR REPAYMENT PLAN
The Department of Education recommends all student loan borrowers review and select a new repayment plan, especially if they can’t make payments.
FACT #6
NEW “FRESH START” DEFAULT REHAB PROGRAM
Student loans in default before the pause began can be put back into good standing by enrolling in the Fresh Start program. If the loan is not in good standing in a year, it will go back into default with all applicable prior remedies in place.
FACT #7
YOUR CONTACT INFO IS CRITICAL
If your contact information changed, your loan servicers can’t notify you about your payments. Even if you don’t receive notification, your loan payments will still be due.
FACT #8
YOUR SERVICER MAY HAVE CHANGED
It is estimated that over 40% of borrowers will have a new servicer. Follow the instructions in step 2 (below) to make sure you are sending your payments to the correct servicer.
Step 2: Find Your Servicer
At the beginning of the COVID Pause, student loan borrowers were either:
- In repayment and the loan servicer likely changed.
- Never entered repayment and likely never knew their servicer.
- Were in default, loan servicer likely changed.
Before repayment starts, it is critical that you find your servicer.
- Go to studentaid.gov
- Log into your account
- Find your dashboard
- Look for the MY AID section
- Select VIEW LOAN SERVICER DETAILS
Next, go to your loan servicer’s website, login to your account and make sure your contact information is updated.
(Alternatively, you may call the Federal Student Aid Information Center at 800-433-3243 to find your servicer, but currently, the average hold times are over two hours.)
You should receive a payment due notice 21 days before your payment is due, BUT there are issues. As of August 1, 2023, Champion has found that many student loans are in the process of being transferred to new servicers, and there is a chance that not everyone will receive notifications.
The studentaid.gov website recommends that if your loan is being transferred, borrowers should contact their previous servicer with any updates. Champion recommends contacting your servicer even if you receive your notice to make sure everything is up to date.
Loan Servicers and Important Contact Information |
|||
|---|---|---|---|
| Contact | Role | Website | Phone |
| Aidvantage | Federal Student Loan Servicer | https://www.mohela.com/ | 800-722-1300 |
| Default Resolution Group | Federal website to help resolve defaulted loans or grants assigned to this group | https://myeddebt.ed.gov/ | 800-621-3115 |
| ECSI | Federal Student Loan Servicer | https://efpls.ed.gov/ | 866-313-3797 |
| Edfinancial | Federal Student Loan Servicer | https://edfinancial.com/ | 855-337-6884 |
| MOHELA | Federal Student Loan Servicer | https://www.mohela.com/ | 888-866-4352 |
| Nelnet* | Federal Student Loan Servicer | https://www.nelnet.com/ | 888-486-4722 |
| OSLA Servicing** | Federal Student Loan Servicer | https://public.osla.org/ | 866-264-9762 |
| Department of Education Fresh Start Program | Temporary program for borrowers in default when covid pause began | https://studentaid.gov/announcements-events/default-fresh-start | 800-621-3115 |
| *Great Lakes Educational Loan Servicers merged with Nelnet during the pause. | |||
| **Listed by studentaid.gov as a federal loan servicer, but the link now redirects to Aidvantage. | |||
Loan Servicers and Important Contact Information |
|||
|---|---|---|---|
| Contact | Role | Website | Phone |
| Aidvantage | Federal Student Loan Servicer | https://www.mohela.com/ | 800-722-1300 |
| Default Resolution Group | Federal website to help resolve defaulted loans or grants assigned to this group | https://myeddebt.ed.gov/ | 800-621-3115 |
| ECSI | Federal Student Loan Servicer | https://efpls.ed.gov/ | 866-313-3797 |
| Edfinancial | Federal Student Loan Servicer | https://edfinancial.com/ | 855-337-6884 |
| MOHELA | Federal Student Loan Servicer | https://www.mohela.com/ | 888-866-4352 |
| Nelnet* | Federal Student Loan Servicer | https://www.nelnet.com/ | 888-486-4722 |
| OSLA Servicing** | Federal Student Loan Servicer | https://public.osla.org/ | 866-264-9762 |
| Department of Education Fresh Start Program | Temporary program for borrowers in default when covid pause began | https://studentaid.gov/announcements-events/default-fresh-start | 800-621-3115 |
| *Great Lakes Educational Loan Servicers merged with Nelnet during the pause. | |||
| **Listed by studentaid.gov as a federal loan servicer, but the link now redirects to Aidvantage. | |||
Step 3: Additional Considerations
Beware of Scammers
The student loan scammers are working overtime. They know this is a stressful time for borrowers and that it is the perfect time to take advantage of people. You must be careful when someone calls you about your loans and watch for red flags. You don’t have to pay to receive help with loan services such as consolidating your federal student loans or applying for an income-driven repayment plan. If you are contacted by a company asking you to pay “enrollment,” “subscription,” or “maintenance” fees to enroll you in a federal repayment plan or forgiveness program, you should walk away. These services and more can be completed by your servicer for free!
Update Your Contact Information with Your Servicer
On your loan servicer’s website and in your StudentAid.gov profile, make sure your name, cell phone, address, and email are up to date so that you can be contacted and don’t miss important updates.
Determine If You’re on the Best Student Loan Repayment Plan
With federal student loans, there are many repayment plan choices, with options to fit most budgets. Before your payment is due in October 2023, review your plan and make any necessary adjustments. All eligibility and plan specifics should be discussed with your servicer to determine the best fit for your budget, loan payoff goal and any forgiveness plans you are working toward. Current repayment plans are listed below.
Standard Repayment Plan The standard repayment plan automatically applied when you leave school, has fixed monthly payments for up to 10 years (up to 30 years for consolidated loans).
Extended Repayment Plan For Direct Loans larger than $30,000, fixed monthly payments for up to 25 years.
Graduated Repayment Plan Payments begin lower and usually increase every two years for up to 10 years (up to 30 years for consolidated loans).
Income-Based Repayment Plan (IBR) Payments are set at 10-15% of discretionary income, but never more than payments on the Standard Repayment Plan, with up to 25 years to pay in full.
Income-Contingent Repayment Plan (ICR) Payments are set at 20% of discretionary income for up to 25 years or the amount you would pay in a fixed 12-year repayment plan adjusted according to your income.
Income-Sensitive Repayment Plan Payments based on low-income qualifications for Federal Family Education Loans (FFEL), with up to 15 years to pay in full.
Pay As You Earn Repayment Plan (PAYE) Payments are set at 10% of discretionary income but never more than what you would pay under the Standard Repayment Plan, with up to 20 years to pay in full. You must be a new borrower on or after October 1, 2007, and must have received a disbursement of a Direct Loan on or after October 1, 2011, to be eligible.
Saving on a Valuable Education (SAVE) Plan – formerly the Revised Pay As You Earn Repayment Plan (REPAYE) Plan*** With this plan, the Direct Loan payments can increase or decrease and are set at 10% of your discretionary income, with up to 20 years to pay undergraduate loans and up to 25 years to pay graduate or professional study loans in full. Currently, any loan amount forgiven may be taxable under Form 1099 reporting guidelines.
***With the end of the payment pause, the proposed Saving on a Valuable Education (SAVE) Plan is set to replace the existing Revised Pay As You Earn (REPAYE) Plan. Student loan borrowers can get lower payments from the new SAVE Plan. Borrowers on the REPAYE Plan will be automatically enrolled and will get the benefits of the new SAVE Plan. Additional program benefits will launch in July 2024.
Set Up Auto-Draft or Payment Reminders
There are many methods you can use to make your student loan payments. Online bill pay and auto-draft are the easiest and ensure your payments arrive on time each month. If you choose another method, put a monthly reminder alert on your calendar with a due date allowing transit time for your payment to arrive on time.
PAYMENT METHODS
Auto-Draft When you sign up for auto debit with your servicer, your payment is automatically deducted from your bank account. If you had auto-draft payments activated before the payment pause, you must set this up again.
Online Bill Pay Use your bank’s online bill pay service (make sure they don’t charge a fee). You’ll need to give the bank the servicer’s name, your account number, and the payment address from your statement. You can set up to have your student loan payment drafted monthly or schedule your payment when you receive your statement.
Pay Servicer Online Each servicer offers you the ability to make online payments through their website. Use the link provided on your statement or sign into your account on your servicer’s website to make your payment.
Mail Mail your payment using the servicer address from your statement. Make sure that you include your account number on your check or money order so that your payment is processed in a timely manner and correctly applied to your accounts. Mail your payment at least 7 days before it is due so that it will arrive on time.
By Phone Call your servicer and make a payment through their automated phone system or with a customer service representative.
Get Help with Special Circumstances and Hardships
With the help of your loan servicer, you should be able to find a plan that works for your budget. However, if you can’t afford the payment because of hardships or special circumstances, ask your servicer about the deferment and forbearance options. The most used options include:
Economic Hardship • Unemployment • School Closure • Military Deferment • Temporary Total Disability • Total and Permanent Disability Discharge
Sign Up for Fresh Start Program for Borrowers in Default
If you were in default at the start of the COVID pause, sign up for the Fresh Start program. Because of the COVID Pause, ALL student loan defaults have been erased from borrowers’ credit history, and no wage garnishment or seizing of tax refunds will occur when payments restart. Those who were in default can even apply for additional student loans. Contact your servicer or go to https://studentaid.gov/announcements-events/default-fresh-start for detailed enrollment instructions.
