Navigating student loans can be overwhelming — particularly when you have to deal with multiple servicers, government programs and repayment plans. The Overview – FSA Student Loan Servicing EdFinancial One of the largest student loan servicers, EdFinancial, is a private company that operates under a contract with the U.S. Department of Education (Dept of Ed) to manage our federal student loans. We’re going discuss all you need to know about EdFinancial, the company’s role working for the Dept of Ed and how it impacts borrowers and how they can successfully handle their loans.
What is EdFinancial?
EdFinancial Services is a student loan servicer that provides service on behalf of the US Department of Education and other lenders. Established in 1988, EdFinancial has developed a strong track record of customer service and loan management for millions of borrowers throughout the country.
I am not sure how they do it in the time of Covid, but the Dept of Ed contracts with some private servicers and EdFinancial is one of a few eligible to service federal student loans, especially loans made under the Direct Loan and FFEL (Federal Family Education Loan) programs. This collaboration guarantees that borrowers obtain help related to billing, repayment plans, forgiveness opportunities, and loan consolidation.
The Role of the Dept of Ed and EdFinancial
The CFPB has some authority over student loan servicing under the Higher Education Act. The Department of Education manages the federal student loan program, but doesn’t directly service the loans. Instead, it contracts with third-party companies, including EdFinancial, to carry out the day-to-day work of servicing the loans. Here’s how the relationship works:
- Dept of Ed is the bank on the loans and they are the ones who create the rules (interest rate, repayment plans, deferment, etc.).
- EdFinancial processes payments, administers accounts, communicates with borrowers and educates them about repayment and forgiveness options.
Once your federal loans are transferred to EdFinancial, they are now the address for all things concerning your loans and your repayment.
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Once you’ve got the hang of the tools though, managing your loans through EdFinancial is fairly simple. Here’s how you can keep track of your student loans:
Create an Online Account
After your loans are transferred to EdFinancial, register for online access at edfinancial. com. Through this portal, you can:
- View loan balances
- Schedule one-time or recurring payments
- Update personal information
- Apply for repayment plans
- Ask for a deferment or forbearance
- Track loan status and history
Explore Repayment Options
EdFinancial provides multiple repayment plans according to your income and financial status. Popular plans include:
- Standard Plan: Flat payments over 10 years
- Graduated Repayment Plan: Payments begin small, then rise every two years
- Income-Driven Repayment Plans (IDR): Payments are calculated based on your income and family size
An income-driven repayment plan such as PAYE, REPAYE, IBR, or ICR is best for those who want an affordable monthly payment or potential loan forgiveness after 20-25 years.
Try Loan Forgiveness Programs
Borrowers who work in qualifying jobs (like public service or education) may be able to qualify for forgiveness programs:
- Public Service Loan Forgiveness (PSLF) Learn about how it works.
- Teacher Loan Forgiveness
- Forgiveness through an Income-Driven Repayment plan
EdFinancial can help you through the application process and keep track of how long you have left before you qualify for forgiveness.
Set Up Auto-Pay
Enrolling in automatic payments via EdFinancial not only provides your guarantee a payment won’t be missed, but will get you a 0.25 percent pickup on on-time graduation, which can really add up.
If You Have Trouble Repaying
If you are struggling from a monetary point of view, EdFinancial has a few opportunities that allow you to remain in deferment or help cater for your financial situation to avoid getting into default on your student loans:
- Deferment: Put your payments on hold (interest may keep accumulating).
- Forbearance: Reduce or suspend payments temporarily because you have financial hardship or are unemployed.
- Debt Consolidation: When you take out one big loan to pay off smaller ones.
Contact EdFinancial right away if you think you will have trouble making payments. They can suggest options that are specific to your circumstances.
How to Contact EdFinancial
If you want help with your loans, there are several ways you can contact EdFinancial:
- Phone: 1-855-337-6884 (Direct Loans) or 1-800-337-6884 (FFELP Loans)
- Online Chat: Can chat through your EdFinancial account portal
- Mail: EdFinancial Services, P.O. Box 36008, Knoxville, TN 37930-6008
- Fax: 1-800-887-6130
They have trained customer service agents ready to help you with repayment plans, deferments, forgiveness applications, and other account updates.
Recurring Problems Borrowers Have With EdFinancial
EdFinancial is reputed for their helpful customer service but some borrowers complain of common issues such as:
- It takes a long time for my paperwork for Income-Driven Repayment plans to be processed
- Payment amount or due date discrepancy
- Trouble with re-employment certification for PSLF
Keep detailed records of all correspondence, keep copies of any forms you submit and check your account activity frequently to avoid frustration.
Useful Insights on Working with EdFinancial
Here’s a handful of savvy strategies to make your EdFinancial experience go as smoothly as possible:
- Monitor your account: Keep track of your balances, due dates and the activity made on the payment.
- Review all your communications: There may still be important news in your email or regular mail.
- Save submitted documents: Particularly for forgiveness or deferment applications.
- Update your contact information: Confirm that your phone, email and address are correct.
- Be preemptive: Don’t let problems fester or grow before reaching out.
Moving from other servicers to EdFinancial
As a result of the Debt of Ed’s federal loan servicing overhaul many borrowers have been relocated to EdFinancial from other servicers (such as FedLoan, Navient, and Great Lakes). If this happens to you:
- You will get communications from your old and new servicers.
- Your loan terms (interest rate, balance and repayment plan) will remain the same.
- You’ll need to sign up for a new EdFinancial online account.
You also need to double-check transferred loan information to make sure it’s accurate.
Conclusion
The collaboration between the Dept of Ed andEdFinancialis intended to provide borrowers with easier and clearer access to managing student loans. Whether you are new to paying back loans, giving consideration to forgiveness, or simply have trouble making payments, we give you the resources and options to understand and manage your student loan repayment plan.
Through awareness, handling situations in advance, and maintaining communication with EdFinancial you can achieve a better repayment experience while working toward the goal of financial freedom.
