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The student loan system is complex and, for many borrowers, extremely confusing. How serious is the problem? Consider these facts:
- Almost 20% of federal student loan borrowers are in default.
- Borrowers who default and don’t subscribe to an income-based repayment plan (IDR) are five times more likely to default a second time.
- Federal loan managers have not always been forthright with borrowers about their options. For example, the federal student aid bureau found that Navient, a leading loan service provider, was steering borrowers for forbearance rather than alternative payment plans.
Many borrowers are unaware of the repayment options and financial hardship programs available to them, putting them at risk of falling behind on their payments and defaulting on their debt. If you are looking for help with your student loans, there is no need to pay high fees; free help with student loans is available.
What kind of free help can you get?
If you are a student loan borrower, you may run into problems during your repayment period, especially if you are paying off your debt for a decade or more. Whether you can’t afford to pay or are having trouble requesting a loan forgiveness, finding a solution can be frustrating.
Some common issues that student loan agencies can help you with include:
Find the right payment plan
If you can’t pay your current monthly payments, you may be eligible for another repayment plan. If you have federal student loans, you may be eligible for an income-based repayment plan, which sets your payments based on your discretionary income and a longer loan term.
There are four IDR plans to choose from, and there are a few small differences between them. If you’re not sure which reimbursement method is best for your situation or how to change plans, you can find free help to discuss your options.
Loan forgiveness eligibility assessment
Although loan forgiveness is not common, there are federal loan forgiveness programs. If you are a teacher, government employee, or work for a nonprofit organization, you may be eligible for partial or full loan forgiveness through the teacher loan forgiveness or public service loan programs. (PSLF).
The eligibility requirements for these programs are strict and require numerous documents and documents. Most borrowers are unsure of the requirements, which could result in their forgiveness requests being denied.
Identify options after defaulting on your debt
Defaulting on your student loans is a serious problem with long-term consequences, ranging from a damaged credit report to wage garnishment. Getting out of default is essential for your finances, but it can be difficult to determine whether consolidating or rehabilitating loans is best.
Understanding Bankruptcy Eligibility
Historically, student loans were almost impossible to pay off in bankruptcy. However, this may be possible if you follow certain procedures and can show that paying off your student loans would place undue hardship on you and your family. A bankruptcy lawyer or student loan lawyer can help you navigate the process.
Disputes with lenders or loan managers
Disputes with lenders or loan managers (the companies hired to handle your loans) are common. According to the Consumer Financial Protection Bureau (CFPB) loan mediator report, problems with lenders or services accounted for 36% of the total student loan complaints submitted.
Whether it’s because you’ve received the wrong information, you’re having an issue with unreported payments, or you’re not getting a response from customer service, asking a third-party organization for help can be a good idea.
7 organizations that offer free or cheap student loan assistance
1. Federal Student Aid Student Loan Support Center
The Federal Student Aid Student Loan Support Center is a free service provided by the US Department of Education. Offering assistance to federal loan borrowers, you can contact the center for information on IDR plans, loan consolidation, or loan exit advice.
To contact the Student Loan Support Center, dial 800-557-7394.
2. National Foundation for Credit Counseling (NFCC)
The NFCC is a non-profit credit counseling agency. While its services aren’t free, its fees are usually low or based on a sliding scale, so you only pay what you can afford.
Through its student loan counseling services, student loan borrowers can meet with an advisor for one-on-one and personalized assistance. Your advisor will help you get an overview of your finances, identify repayment options, and create a repayment plan so you can tackle your debt.
The NFCC also offers debt management plans and bankruptcy advice for people considering these options. To get started, visit NFCC.org or dial 877-406-6322.
3. National Association of Consumer Advocates (NACA)
NACA is a non-profit organization with over 1,500 members who are advocates working on behalf of consumers. Their website provides information on student debt management and tips on what to do if your loans are in arrears or if you are contacted by collection agencies.
If you are looking for a lawyer specializing in student loans, the NACA also has a lawyers directory specialists in this area of ââlaw.
4. Help for student loan borrowers
Help for student loan borrowers is a resource offered by the National Consumer Law Center for federal and private student loan borrowers.
Through the site, you can get information on managing your loans, available student loan relief programs and details on your repayment options. It also offers resources for more in-depth issues, including:
- Finding legal help for student loan borrowers
- Get out of the fault
- Management of calls from collection agencies
- Student Loan Bankruptcy Eligibility
The site is free to use, but the Student Loan Assistance Project does not manage your loans or intervene on your behalf; it simply gives you the information and tools you need to manage your debt.
5. Student loan mediators
A student loans ombudsperson is a neutral third party who aims to resolve disputes between borrowers and student loan managers. An ombudsman can help you with the following issues:
- Discrepancies with your loan balance or payments
- Accounts wrongly defaulted
- Understand your repayment options
- Refusal of loan release programs
An ombudsman can’t force your loan officer to take action, but if the evidence you provide is compelling, the ombudsman can speak with the loan officer to make the necessary changes.
Federal loan borrowers can contact the Federal Student Aid Ombudsman through the comment center. If you have private student loans, you can submit your issue through the CFPB complaints center. Some states also employ their own student loan ombudsperson or student advocacy group; find out if your state offers this with a quick Internet search.
6. The Institute of Student Loan Counselors (TISLA)
TISLA is a non-profit organization that provides free student loan information and resolution services. With TISLA, you can get advice on the following topics:
- Repay your loans
- Choose a repayment plan
- Loan forgiveness eligibility
- Getting out of default on a student loan
- Fill out the necessary forms for forbearance or IDR plans
TISLA does not provide legal advice or manage your loans for you. It is a clearinghouse that gives borrowers the information they need to be their own advocates and manage their debt. Visit FreeStudentLoanAdvice.org for more information.
7. Your lender or loan officer
Your lender or loan officer is your main point of contact if you have problems with your loans. If you can’t pay your payments, need to subscribe to another payment plan, or have questions about how the payments are applied, you can call your lender’s customer service department for assistance. aid.
If you don’t know who your loan manager is, you can log into the Federal student aid website (for federal student loans) or check your credit report at AnnualCreditReport.com (for private student loans).
What to avoid
When you’re overwhelmed by your student loans, it’s easy to feel hopeless. And when someone is in financial trouble, they become a bigger target for crooks who claim they can alleviate student debt and, instead, take money. While there is legitimate student loan help, there are also plenty of fraudulent companies out there.
Before working with a business or paying any fees, verify the business credentials. If it is not backed by the Department of Education or if it is not a non-profit organization, proceed with caution. If the company is trying to pressure you into signing a contract or handing over your credit card information, that’s another major red flag.
If in doubt, contact your loan officer to see if there are options to reduce your payments or defer your debt; your loan manager will usually be the best place to get free student loan help.