Need Advice About Your Student Loans? Your Loan Servicer Can Help!

pay your loan servicerLet’s face it, repaying your student loans can be quite overwhelming, especially if you’re new at it. I may have spent my senior year of college interning at Federal Student Aid, but when my first student loan bill came in the mail, I’ll admit, I had no idea where to begin.

One of my first questions was, “Who do I pay?” I knew I had only federal student loans, but I kept getting letters and e-mails from Sallie Mae.* Why was that? If you asked yourself a similar question, this may help.

*Sallie Mae is my federal student loan servicer, but may not be yours. Here is a complete list of the federal student loan servicers.

Why am I receiving federal student loan bills from a company rather than the U.S. Department of Education?

Those bills you get in the mail are coming from one of the U.S. Department of Education’s federal student loan servicers. These loan servicers are companies that work on behalf of the Department of Education to help you understand your student loans and to facilitate payments.

Note: Even though you make your monthly payments to your loan servicer, your loans are still federal student loans and are owned by the Department of Education.

What can a loan servicer help me with?

Loan servicers do more than just collect payments from you. Your loan servicer is there to ensure that you, as a federal student loan borrower, get the customer service and repayment support you need to successfully repay your student loan.

Your loan servicer can help you:

How do I find out how many loans I have and who my loan servicer is?

To view information about all of the federal student loans you have received and to find contact information for your loan servicer, visit www.nslds.ed.gov and select “Financial Aid Review.” You will then be prompted to log in using your Federal Student Aid PIN, so make sure you have that handy.

Note: If you have multiple federal student loans, you may have more than one loan servicer, so make sure you click through each loan individually for information specific to that loan.

If you also have private student loans, I recommend getting a free copy of your credit report from www.annualcreditreport.com to identify them.

Not sure what kind of loans you have? It’s best to look at nslds.ed.gov and get a free credit report too. Then you’ll know about all of your loans right away.

Moral of the story: Your loan servicer is here to help.  

Trust me, as a recent college graduate, I know how difficult it can be to make these payments every month. Truthfully, I still get anxious every time that payment comes out of my bank account. But that’s all the more reason to stay in touch with your loan servicer. Whether you’re having trouble making your payments or you just want advice about which repayment option is best for you, they can help.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.

Student Loans 101

Ambiguous Girl_Blue#1010231When it comes to repaying your federal student loans, there’s a lot to consider. But, by taking the time to understand the details of repayment, you can save yourself time and money. This should help you get started.

When do I begin repaying my federal student loans?

You don’t have to begin repaying most federal student loans until after you leave college or drop below half-time enrollment. Many federal student loans have a grace period. The grace period is a set period of time after you graduate, leave school, or drop below half-time enrollment before you must begin repaying your loan. The grace period gives you time to get financially settled and to select your repayment plan. Note that for most loans, interest will accrue during your grace period.

Your loan servicer or lender will provide you with a loan repayment schedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment.

Whom do I pay?

The U.S. Department of Education uses several loan servicers to handle the billing and other services on federal student loans. Your loan servicer will work with you to choose a repayment plan and will assist you with other tasks related to your federal student loans. It is important to maintain contact with your loan servicer and keep your servicer informed of any changes to your address, email, or phone number.

How much do I need to pay?

Your bill will tell you how much to pay. Your payment (usually made monthly) depends on

  • the type of loan you received,
  • how much money you borrowed,
  • the interest rate on your loan, and
  • the repayment plan you choose.

You can use our repayment estimator to estimate your monthly payments under different repayment plans to determine which option is right for you. Just remember, if you would like to switch repayment plans, then you must contact your loan servicer.

What should I do if I’m having trouble making my student loan payments?

Contact your loan servicer as soon as possible. You may be able to change your repayment plan to one that will allow you to have a longer repayment period or to one that is based on your income. Also, ask your loan servicer about your options for a deferment or forbearance or loan consolidation.

Still have questions?

On the last Wednesday of each month at 5 p.m. Eastern time (ET), Federal Student Aid (@FAFSA) hosts #AskFAFSA Office Hours. This live Q&A session on Twitter gives you the opportunity to get your questions answered by the experts. This month, we’ll be focusing on student loan repayment. You can submit your questions and join the conversation using the hashtag #AskFAFSA. On Wednesday, May 29, at 5 p.m. ET, tune in during the live event for answers from our experts.

Keep in mind that your loan servicer is always the best place to go for assistance specific to your situation. If you have any questions, don’t hesitate to contact your loan servicer.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.

4 Mistakes I Made with My Student Loans and How You Can Avoid Them

Take out loan graphicIt’s been hard to come to terms with, but I need to face the facts: I’m not in college anymore. In fact, this spring marks two years since I graduated from college and went into repayment on my student loans. I know, not the most exciting thing in the world, but important. So while I don’t claim to be a student loan expert, I have learned a lot of lessons along the way, mostly through trial and error. In hopes that you won’t make the same mistakes I did, here are some things I wish I had known when I was graduating and getting ready to start repaying my student loans:

  1. I should have kept track of what I was borrowing.

Let’s be real. When you take out student loans to help pay for college, it’s easy to forget that that money will eventually have to be paid back … with interest. The money just doesn’t seem real when you’re in college, and I didn’t do a good job of keeping track of what I was borrowing and how it was building up. When it was time to start repaying my loans, I was quite overwhelmed. I had different types of loans and different interest rates. When I did eventually see my loan balance, I was pretty surprised.

You can avoid this problem. Had I known there was a super easy way to keep track of how much you’ve borrowed in federal student loans, I would have been much better off. Just go to nslds.ed.gov, select “Financial Aid Review,” log in, and you can view all of your federal student loans in one place! How did I miss that?

  1. I should have made interest payments while I was still in school.

If you’re anything like me, you probably consumed your fair share of instant noodles while trying to survive on a college student’s budget. Trust me, I get it. But one thing I really regret when it comes to my student loans is not paying interest while I was in school or during my grace period. Like I said, I was far from rich, but when I was in college, I did have a work-study job and waited tables on the side. I probably could have spared a few dollars each month to pay down some student loan interest. Remember, student loans are borrowed money that you have to repay with interest and more importantly, that interest may capitalize, or be added to your total balance. My advice: Even though you don’t have to, do yourself a favor and consider paying at least some of your student loan interest while you’re in school. It will save you money in the long run.

     3. I should have kept my loan servicer in the loop

If you’re getting ready to graduate or have graduated recently and haven’t heard from your loan servicer, make sure you check that your loan servicer has up-to-date contact info for you. When I graduated and moved into my first big-girl apartment, I forgot to change my address with my loan servicer. I found out that all of my student loan correspondence was going to my mom’s address. I hadn’t even thought to update my loan servicer with my new contact information. Don’t make the same mistake I did. Keep your servicer informed of address, email, and phone changes.

  1. I should have figured out what my monthly loan payments were going to be BEFORE I went into repayment.

By the time my grace period was over, I had a decent idea of how much I had borrowed in total, but I had no idea what my monthly payments would be. I thought I was fine. I had started my new job and been paying rent and other bills for about six months. Then my grace period ended, and I got my first bill from my loan servicer. It was definitely an expense I hadn’t fully taken into account.

Don’t make the same mistake. Luckily for you, Federal Student Aid just launched a new repayment estimator that allows you to pull your federal student loan information in order to compare your monthly payments under different repayment options side by side. That way, you know what to expect and can budget accordingly … unlike me.

I’ll be the first to admit that this whole process can be a little overwhelming, especially when you’re new at it. But just remember, your loan servicer is there to help you. If you have questions or need advice, don’t hesitate to contact them.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.

What Is a Student Loan Servicer and Why Should I Care?

repayment plan imageSo you took out a federal student loan and now it’s time to pay it back. I was in your exact position 2 years ago and even though I was working at Federal Student Aid, the student loan repayment process had me overwhelmed.

One of my first questions was: Why am I receiving federal student loan bills from a company rather than the U.S. Department of Education? If you have asked yourself a similar question, this may help:

What is a loan servicer?

A loan servicer is a company that handles the billing and other services on your federal student loans. So those bills you get in the mail? There is a good chance they are coming from a loan servicer on behalf of the U.S. Department of Education.

How do I find out who my loan servicer is?

To view information about all of the federal student loans you have received and to find contact information for your loan servicer, visit www.nslds.ed.gov and select “Financial Aid Review.” You will then be prompted to log in using your Federal Student Aid PIN, so make sure you have that handy.

Note: If you have multiple federal student loans, you may have more than one loan servicer, so make sure you click through each loan individually for information specific to that loan.

Why should I care?

There are lots of reasons you should care!  Among many other things, your loan servicer

Moral of the story: Keep in contact with your loan servicer.

The student loan repayment process can be confusing, especially if you’re new at it, but your loan servicer is there to help. Make sure you stay in touch with them and use the resources they have available for you.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.

4 Things to Do During Your Student Loan Grace Period

Grace 6 month 9 monthYour student loan grace period is a set amount of time after you graduate, leave school, or drop below half-time enrollment before you must begin repayment on your loan. For most student loans, the grace period is six months but in some instances, a grace period could be longer. The grace period gives you time to get financially settled and to select your repayment plan.*

Here are four things you can do during your grace period to prepare for repayment:

1. Get Organized

Start by tracking down all of your student loans. There is a website that allows you to view all your federal student loans in one place.

You can log into www.nslds.ed.gov using your Federal Student Aid PIN to view your loan balances, information about your loan servicer(s), and more.

Note: Don’t forget to check to see if you have private student loans.

2. Contact Your Loan Servicer

loan servicer is a company that handles the billing and other services on your federal student loan. Your loan servicer can help you choose a repayment plan, understand loan consolidation, and complete other tasks related to your federal student loan, so it is important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.

To find out who your loan servicer is, visit nslds.ed.gov. You may have more than one loan servicer, so it is important that you look at each loan individually.

3. Estimate Your Monthly Payments Under Different Repayment Plans

Federal Student Aid recently launched a Repayment Estimator that lets you compare your monthly student loan payment under different repayment plans to help you figure out which repayment plan is right for you.

Just go to www.StudentLoans.gov –> Log in –> Click “Repayment Estimator” in bottom left corner. It will pull in all of your federal student loan information automatically so you can compare repayment plans based on your specific situation.

4. Select The Repayment Plan That Works For You

Although you may select or be assigned a repayment plan when you first begin repaying your student loan, you can change repayment plans at any time. Flexible repayment options are one of the greatest benefits of federal student loans. There are options to tie your monthly payments to your income and even ways you can have your loans forgiven if you are a teacher or employed in certain public service jobs. Once you have determined which repayment plan is right for you, you must contact your loan servicer to officially select a new repayment plan.

* Not all federal student loans have a grace period. Note that for many loans, interest will accrue during your grace period.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.

@FAFSA to Host First-Ever Bilingual #AskFAFSA Office Hours

On the last Wednesday of each month, Federal Student Aid (@FAFSA) hosts #AskFAFSA Office Hours, a live Q&A session on Twitter during which students tweet questions to the @FAFSA team and receive live answers from the experts. Each month, #AskFAFSA Office Hours focuses on a different topic related to financial aid. Past topics have included financial literacy, Back-to-School, and FAFSA Completion.

This month, Federal Student Aid has partnered with New Futuro to host our first bilingual #AskFAFSA Office Hours! The topic: Why FAFSA? Why Now?

Starting now, students and parents are invited to tweet their questions to us in English or Spanish using the hashtag #AskFAFSA. On March 27 at 5 p.m., you can follow the conversation live as our experts provide answers to your questions!* Not able to make the live chat? We’ll post a summary of the Q&A on our Storify page following the event.

*Answers will be provided by @FAFSA in English and @NewFuturo in Spanish.

Top 3 FAFSA FAQs

Completing the Free Application for Federal Student Aid (FAFSA) is the first step in accessing the more than $150 billion available in federal student aid. Since the 2013-14 FAFSA launched, there are a few questions we’ve seen popping up more than any others. Let’s go through them.

How can I complete the FAFSA if my parents or I haven’t filed my 2012 taxes yet?

FAFSA ImageYou CAN complete the 2013-14 FAFSA even if you or your parents haven’t filed your 2012 taxes yet. Here’s what you or your parents can do in your respective sections of the FAFSA:

  1. When the FAFSA asks: “Have you completed a 2012 income tax return?” Select “Will file.”
  2. Estimate income.
    • If your 2012 income is similar to your 2011 income, use your 2011 income tax return to provide estimates for questions about your income.
    • If your income is not similar, click Income Estimator for assistance estimating your adjusted gross income, and answer the remaining questions about your income to the best of your ability.
  1. After you file your 2012 tax return, go to www.fafsa.gov and correct your information.
    • Note: Once you complete your 2012 taxes, you may also be eligible to use the FAFSA’s IRS Data Retrieval Tool to automatically transfer your tax return information from the IRS into the FAFSA.

When is the FAFSA deadline?

States, schools, and the federal government each have their own FAFSA filing deadlines . It is important that you research all of these deadlines and complete the FAFSA by whichever deadline comes first. That being said, some types of financial aid are awarded on a first-come, first-served basis, so we recommend you complete the FAFSA as soon as possible in order to maximize the amount of financial aid you can receive.

Which FAFSA should I complete?

When you log into www.fafsa.gov, you will be given two different options: “Start a 2013-14 FAFSA” and “Start a 2012-13 FAFSA.” Which should you choose?

    • If you’ll be attending college between July 1, 2013 and June 30, 2014 select “Start a 2013-14 FAFSA.”
    • If you’ll be attending college between July 1, 2012 and June 30, 2013 select “Start a 2012-13 FAFSA.”
    • If you are applying for a summer session, or just don’t know which application to complete, check with the college you are planning to attend.

For more information about FAFSA, visit studentaid.gov/fafsa.

5 Reasons You Should Complete the Free Application for Federal Student Aid (FAFSA)

FAFSA January Free Logo

The new FAFSA for the 2013-14 school year is now available.

1. It’s the only way to gain access to the more than $150 billion available in federal student aid.

Completing the FAFSA is the first step toward getting federal aid for college, career school, or graduate school. Federal Student Aid provides more than $150 billion in grants, loans, and work-study funds each year, but you have to complete the FAFSA to see if you can get any of that money. Not to mention, many states, schools and scholarships also use the FAFSA to award financial aid, so every college-bound student should complete it.

2. It’s FREE!

The FAFSA is free to complete and there is help provided throughout the application. Several websites offer help filing the FAFSA for a fee. These sites are not endorsed by the U.S. Department of Education. We urge you not to pay these sites for assistance that you can get for free at the official FAFSA website: www.fafsa.gov.

3. It’s easier than ever.

We’ve done a lot over the past few years to simplify the FAFSA. One of the most exciting enhancements has been the launch of the IRS Data Retrieval Tool. The tool allows students and parents to access the IRS tax return information needed to complete the FAFSA, and transfer the data directly into their FAFSA from the IRS Web site, saving lots of time. This year, the IRS Data Retrieval Tool will launch in early February, so be on the lookout for that.

4. It only takes about 30 minutes to complete.

Given all the simplifications we’ve made over the last couple of years, the FAFSA now only takes about 30 minutes to complete. That’s probably less time than you spend watching your favorite TV show each week. And think of the benefits: spend 30 minutes completing the application and you could qualify for thousands of dollars in financial aid. Talk about return on investment.

5. More people qualify than you’d think.

If you don’t fill out the FAFSA, you could be missing out on a lot of financial aid! I’ve heard a number of reasons students think they shouldn’t complete the FAFSA. Here are a few:

    • “I (or my parents) make too much money, so I won’t qualify for aid.”
    • “Only students with good grades get financial aid.”
    • “The FAFSA is too hard to fill out.”
    • “I’m too old to qualify for financial aid.”

If you think any of these statements apply to you, then you should read “Myths About Financial Aid.” The reality is, EVERYONE should fill out the FAFSA! Don’t leave money on the table.

For information and tips on completing the FAFSA, visit StudentAid.gov/fafsa.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.

Get Your Financial Aid Questions Answered During #AskFAFSA Office Hours!

Tired of waiting in line at the financial aid office? Get your questions answered during #AskFAFSA Office Hours on Twitter!

OFFICE HOURS PROMOOn Wednesday, November 28th at 5:30pm ET, join @FAFSA as we host #AskFAFSA Office Hours live from the Federal Student Aid Fall Conference, where we will have a room full of financial aid professionals ready to answer your financial aid questions live on Twitter.

Here’s how it works:

  • Have questions about financial aid? You can start submitting your questions on Twitter today. Be sure to include the #AskFAFSA hashtag in your tweets. We will be accepting questions on Twitter from now through Wednesday.
  • On Wednesday, November  28th, at 5:30pm ET, follow @FAFSA or the #AskFAFSA hashtag on Twitter to join the conversation. We’ll be answering your questions live.
  • Can’t make the live session? A summary of #AskFAFSA Office Hours, including the full Q&A, will be posted on Storify following the event.

What Is a Loan Servicer and Why Should I Care?

Loan Servicer GraphicSo you took out a federal student loan and now it’s time to pay it back. I was in your exact position a year ago and even though I was working at Federal Student Aid, the student loan repayment process was overwhelming.

One of my first questions was: Why am I receiving federal student loan bills from a company rather than the U.S. Department of Education? If you have asked yourself a similar question, this may help:

What is a loan servicer?

A loan servicer is a company that handles the billing and other services on your federal student loans. The statement you receive in the mail is coming from a loan servicer on behalf of the U.S. Department of Education.

How do I find out who my loan servicer is?

To view information about all of the federal student loans you have received and to find contact information for your loan servicer, visit www.nslds.ed.gov and select “Financial Aid Review.” You will then be prompted to log in using your Federal Student Aid PIN, so make sure you have that handy.

Note: If you have multiple federal student loans, you may have more than one loan servicer, so make sure you click through each loan individually for information specific to that loan.

Why does it matter?

There are several reasons that being familiar with your loan servicer is important, including the fact that your loan servicer:

Moral of the story: Keep in contact with your loan servicer.

The student loan repayment process can be confusing, especially if you’re new at it like me, but your loan servicer is there to help. Make sure you stay in touch with them and use the resources they have available for you.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.