ICFE eNEWS #15-15 - May 29th 2015
"Beware! You Don't Have to Pay for Help with Your Student Loans"
There are countless ads online from companies offering to help
you manage your student loan debt…for a fee, of course. But, did
you know that you can get help with your student loans for free?
If you're a federal student loan borrower, the U.S.
Department of Education provides free assistance to help:
Lower Your Monthly Payment;
See If You Qualify For Loan Forgiveness; and
Out of Default
Lower Your Monthly Payment
you out of a job or not earning very much? The federal
government makes it easy for you to switch to a more affordable
repayment plan at any time at no cost.
Your loan servicer
– the company that collects your payments, responds to your
customer service inquiries, and does other tasks related to your
federal student loan – can help you decide which repayment plan
best suits you. Click here for a list of servicers' contact
information and to find out how to look up your servicer.
Before you contact your servicer, check out the Repayment
Estimator to get an idea of plans that may be available to you
and to see estimates for your monthly payments.
Consolidate Your Loans
If you have multiple
loans that you want to combine, you can apply for loan
consolidation through StudentLoans.gov. The application is free,
and there are no extra processing fees.
Some people find
it simpler to group all their student loans into a single loan
with one interest rate and one monthly payment. If you choose to
consolidate your federal student loans with the U.S. Department
of Education, you, too, may be able to take advantage of
flexible repayment plans, including ones that base your payments
on your income and family size.
See If You
Qualify For Loan Forgiveness
Loan forgiveness is
the process by which a borrower is released from their
obligation to repay all or a portion of the principal and
interest on a student loan. This also is known as discharge or
cancellation. Loan forgiveness programs were created to
encourage people to take certain types of jobs, to help
borrowers with lower income jobs, and to compensate for
Many student loan companies
advertise that they can help you get your loans forgiven. And
sometimes, they simply are using the Department of Education's
free resources to help you, but are charging you to do so.
In fact, your loan servicer can help you determine if you
qualify for loan forgiveness... for free.
If your loan is already in default,
the debt relief companies know it and may target you with online
and mobile ads, phone calls, and maybe even letters to your home
address. By being in default, you've already incurred added
interest, and you're subject to collection fees. There's no
reason to add additional fees by signing up with a debt relief
Even if your loan is in default, loan
consolidation is free and so is getting on a loan rehabilitation
plan. Find out how to get out of default.
Protecting Your Log-In and Account Information
When student loan debt relief companies offer to manage your
loan account, to do so, they will ask you to provide them with
your federal student aid log-in information, or sign a Power of
Attorney. Think about it: your log-in information is the
equivalent of your signature on documents related to your
student loan. If you share this information or sign a Power of
Attorney, you are giving that person the power, literally, to
take actions on your student loan on your behalf.
the debt relief company collects fees from you, but never
actually makes any payments on your loan for you, you still will
be responsible for those outstanding payments and late fees. You
should protect your federal student aid log-in and account
information as securely as you guard your ATM PIN.
Do You Think You've Been Scammed or Need a Resolution?
If you've already signed a contract with a debt relief
company, and you think they have cheated you, call the Consumer
Financial Protection Bureau (CFPB) at 1-855-411-2372, or submit
a complaint online. Under "What type of service is your
complaint about?" select Debt Settlement. Then, choose I have a
problem with a company that I hired to help reduce or settle my
Also, many state governments have an Office of
Consumer Affairs or Consumer Protection either within or
affiliated with the office of the state's Attorney General.
If you've tried to work out your student loan debt issues
with your servicer without success, you can contact the Federal
Student Aid Ombudsman Group, which helps resolve disputes
related to Direct Loans, Federal Family Education Loan (FFEL)
Program loans, Guaranteed Student Loans, and Perkins Loans.
Remember, there are no student loan companies affiliated
with the Department of Education that charge fees to help you
manage your loan repayment. With the resources available to you
through the Department of Education, you can successfully manage
your loan repayment for free.
Author April Jordan is
a senior communications specialist at Federal Student Aid.
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Also, visit the ICFE's new Web site: StudentDebtHelp.org
Paul S. Richard
President - Executive Director
Institute of Consumer
Financial Education (ICFE)
About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.
The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org). CASDRAP disbanded in 2010, shortly after the web site project was completed. In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.
The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.
Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org. Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G, a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.