How Your Servicer Can Help with Student Loans

If you have student loans and are searching for assistance, your loan servicer is one of the first places you should look to for help. Too often, borrowers turn to friends and family for advice or help with monthly payments without ever speaking with their loan servicer. When borrowers don’t fully understand their options and how to take advantage of them, it’s easy to make bad decisions, such as using credit cards to make their monthly student loan payments, causing them to end up in a worse position than where they originally started.

Contacting the Servicer

Reaching out to your servicer to explore your options can be one of the best ways for you to stay on track financially. Their trained representatives are very knowledgeable about all types of student loans and are equipped with resources to help you navigate various financial situations. Here are some benefits to contacting them:

1. They can help you become more financially literate.
Few people are experts on navigating the world of student loans, and recent graduates often get lost in the complexity of repayment details. Student loan servicers are fully versed in this area and can also offer financial literacy resources, such as budgeting and credit tips, to help you stay on track. Learn as much as you can about managing your money effectively to ensure a financially stable future.

2. They can help you understand the terms of your loans.
Federal and private student loans can come with a wide variety of terms, including a choice of fixed or variable interest rates, multiple repayment options, repayment terms ranging from five to 25 years, and money-saving borrower benefits. Your specific loan terms will depend on the type of loan you were approved for and the options you chose, which often vary from one loan to the other. It’s important to understand which type of loans you have and the repayment terms you agreed to. Your servicer can review these terms with you and assess available options that will help you reach your financial goals.

3. They can help you enroll in automatic payments, which may lower your interest rate and ensure on-time payments.
Many lenders offer an interest rate reduction if you have your monthly payments automatically withdrawn from a savings or checking account. This could save you hundreds of dollars over the life of your student loan payments. It’s also a great way to ensure you make your monthly payments on-time and don’t accidently miss a payment. Missing a monthly payment could lead to late fees, and depending on how late your payment is, it could end up on your credit report, which might lower your credit score.

4. They can help you get back on track by establishing a deferment or forbearance plan.
There may be certain circumstances where you can no longer keep up with your monthly payments. Whether you’ve been laid off from your job, recently returned from serving in the military or Peace Corps, going back to school, or experienced an unexpected hardship, things don’t always go as planned. Whatever the reason, your servicer can review your student loan account to determine whether you’re eligible for a deferment or forbearance, and help you apply for the best option.

5. They can provide information about loan forgiveness, cancellation and discharge.
While student loans must be repaid even if you don’t obtain a degree or can’t find a job, there are certain situations where your loan may be cancelled, forgiven or discharged. For example, some student loans may be cancelled, forgiven, or discharged if your school closes while you are enrolled and you cannot complete your program, you are a teacher in a low-income elementary or secondary school, you are employed in a public service job, you become totally and permanently disabled, you die, or in some rare cases, you file for bankruptcy. Your servicer can review your loans and tell you about available options and requirements so you can make an informed decision in what may be a difficult time.

6. They can help you with student loan refinancing.
While student loan refinancing and consolidation may be a good option for borrowers looking to lower their monthly payments, it can also be a great way to save money for those looking to take advantage of historically low interest rates. Often times students and parents who took out loans years ago can now refinance those loans at better interest rates and with terms that better reflect their current financial situation. Whether you are looking for payment relief, want to lower the overall costs of your student loans, or just want to simplify your student loan payments, exploring your options with your servicer can lead to loans that better meet your current and future needs.

If you’re feeling a bit overwhelmed by your student loan payments, looking to lower your total costs, or just hoping to get a better understanding of your student loans, don’t hesitate to reach out to your servicer for assistance. They can help you manage your student loan payments as responsibly and simply as possible.

Dean Wildman is the Director of U-fi Student Loans and is an expert in many aspects of education finance. A graduate of the University of Maryland’s Robert H. Smith School of Business, Dean has worked in various education loan marketing, finance, and operational capacities for over 20 years.

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