Officials Believe Student Loan Freeze Could Be Extended. Here’s What You Need To Know
A number of federal student loans currently serviced by FedLoan (PHEAA) have begun to transfer to other lenders. Transfers for the loans began last fall. Unfortunately, the transfers do not change anything regarding the loans. All terms, conditions, interest rates, loan discharge or forgiveness programs, and repayment plans will remain the same. There is currently a temporary suspension of payments and 0% interest. As of right now, the payment pause is scheduled to end on Aug. 31. It is still possible for the Department of Education to extend the moratorium, Miguel Cardona told CNET in June. During his conversation with CNET, Cardona said, “I don’t have any information now to share with you about when it would end or what the conversations are about when it’s going to be lifted. I know we have a date, and it could be that it’s extended. Or it could be that it starts there. But what I will say is that our borrowers will have ample notice.”
Transferring student loans simply means the billing will be handled by another servicer. Approximately 35 million Americans, including 7 million who are in default, were affected by the freeze, according to CNET. As of yet, no official decision has been made regarding the forgiveness of broad student loans. According to Click on 4 Detroit, during the transfer process, expect the following:
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You will receive an email or a letter from your assigned servicer to inform you about the transfer.
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You will receive a welcome letter from the new servicer after the new servicer receives your loans. This notice will provide you with the contact information for the new servicer and inform you of actions that you may need to take.
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All of your loan information will be transferred from your assigned servicer to your new servicer, but you may only be able to see online information that covers the period since your new servicer took your loans over.
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There will be no change in the terms of your loans.
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Your previous loan servicer and new loan servicer will work together to make sure that all payments you make during the transfer process are credited to your loan account with the new servicer.
Click on 4 Detroit also provided a list of federal student loan servicers on their site as well. As for students who’s loans were in “default,” according to the U.S. Department of Education, those accounts under “default” will be returned to “good standing.”
