Student Loans Zeroed Out – Check your credit report and it says your student loan balance is zero. Or maybe your loan is past due. Or better yet, the loans disappeared altogether. Whatever that means, you’re excited because you hope to be free of the debt that’s been haunting you for years. I hate to tell you, but that might not have happened.
If you haven’t received notice from the federal government or a private lender like Navient that your loans have been discharged, the answer is that your loans have been transferred to a new company and you still owe the balance.
Student Loans Zeroed Out
Last year, three companies — FedLoan, Granite State Management and Navient — terminated their contracts with the Department of Education. The department had to move millions of borrowers to new services. Many of these actions have taken place, but more are expected to come before federal student loan payments resume.
Student Loan Crisis
Your student loans may disappear from your credit report or show a paid off or zero balance. Don’t get too excited! I doubt you ran away. Most likely, the loans are transferred to a new servicer, who will report the debt immediately — unless you defaulted long ago. In this case, the loan will not be repaid. They will sit and wait, ready to pounce on you when you least expect it.
Of course, your student loans may have mysteriously disappeared from your credit report because the loans were forgiven as part of the federal government’s comprehensive overhaul of existing student loan forgiveness programs. These changes resulted in billions of dollars in debt cancellations for hundreds of thousands of borrowers with federal loans.
But if it does, you will receive a letter or email from your department or student loan servicer confirming that your loans have been forgiven or terminated under a specific program. For example, if you apply for public loan mapping or PSLF forgiveness, FedLoan Servicing will send you a letter confirming that your student loan balance is zero because it has been discharged:
Being paid in full with student loan consolidation means that several loans are combined into one larger loan – usually with better repayment terms, such as more flexible repayment options, lower monthly payments or more opportunities for loan forgiveness. This results in full repayment of the consolidated debt and a “paid in full” status for the borrower.
Major Overhaul To Student Loan Forgiveness. Who Gets Their Debts Erased?
In the past, federal student loan borrowers consolidated their loans through the Federal Family Education Program or the Federal Student Loan Program. But Congress ended the FFEL program in early 2010. As a result, borrowers who wish to consolidate student loans now receive direct consolidation loans.
Note: Confederation will not save you money with lower interest rates. The new loan will have a fixed interest rate for the life of the loan based on an average of current interest rates.
Maybe your letter got lost in the mail or the email went to your spam folder. It is possible. Here’s how to find out if you still owe federal student loans:
Call the Federal Assistance Information Center at 1-800-433-3243. Give the representative your Social Security number and birthday, and ask them to check the student loan database to see if you have any outstanding loans. If not, congratulations. You no longer owe federal student loans. But if you do, get the student loan servicer’s contact information. Work with that company to determine reimbursement options before the pandemic subsides.
Should I Pay Off My Student Loans Right Now? Here’s What You Should Consider.
For private student loans, ask the borrower the same question: Do I still have a balance? If not, ask if your loans have been canceled, written off, or sold to a collection agency. Read more about how to avoid private student loans.
If it turns out that your loans are not forgiven, here are four things you can do before forbearance ends to make reasonable monthly payments and eventually have your loans forgiven:
Sign up for income-based repayment. IDR programs limit your student loan payments to 10-20% of your discretionary income. The programs have another benefit: loan forgiveness after 20 to 25 years of payments. Read more about avoiding income-related repayments.
Exit by default. Defaults and delinquencies close most avenues for loan forgiveness. Also, defaulting on a student loan puts you at risk of having your wages garnished, tax refunds seized, and Social Security benefits offset. Getting out of default will restore your eligibility for income-driven repayment plans, deferment, loan forgiveness, etc. It can also improve your credit score.* Read more about how to spot delinquent student loans and how to get student loans out of default.
Student Loan Refinancing Lenders
Consolidate if you have FFEL loan. The Department of Education has announced that a one-time arrangement will be made in an account for crediting borrowers to IDR map to resolve issues related to forbearance management. Eligibility for this benefit is limited to installment loan borrowers only. If you have a commercial FFEL loan—the type of loan you have if you have to pay off the entire pandemic—you must refinance the loans into a new Direct Consolidation Loan to qualify. Read more about changing IDR account.
Apply for borrower protection. Nearly 200,000 former students who attended a for-profit school will have loans they say defrauded them as part of a deal reached by the Education Department to settle pending lawsuits from the Trump administration. Check the Borrower Protection School List to see if your school is listed. If so—or even if you believe your school lied to you about job placement, job readiness, credit transfer, etc.—file a claim at studentaid.gov. You may be eligible to have your credit written off.
* The Department of Education announced in April that it would automatically reinstate all defaulting federal borrowers before resuming payments. Read more about
During the pandemic, the White House froze student loan payments, zeroed out interest rates, and cleared the accounts of hundreds of thousands of federal student borrowers with FFEL and Direct loans.
Biden’s Income-driven Repayment Plan Would Turn Student Loans Into Untargeted Grants
The Biden administration is proposing to end interest-rate funding and permanently change amnesty programs to make it easier for public employees, the disabled and those who went to schools that closed or defrauded students to get relief and introduce new income-based repayments. A program that lowers monthly payments and leads to early loan forgiveness.
Given all of these changes, your loans may be discharged, which could explain why your student loan status is downgraded or shows as paid off on your credit report. But before you jump for joy, check the status of your loan with the Ministry of Education. A more likely explanation is that your loans have been transferred to a new company – work with them to find a payment plan you can afford. COVID-19 Relief – Call now for debt relief and payment information. (Be prepared with information about your debts and financial situation) Must have debts greater than $10,000.
1.2 Additional resources to help manage other types of unsecured debt, including credit cards and personal student loans
2.1 If you need help consolidating your student loans – call Golden Financial Services at 1-866-376-9846
Along With Zero Student Loans
2.2 An example of Pay As You Earn (PAY), one of the most popular student loan repayment plans.
Federal scholarship programs are available under William D. Ford. Federal student loans allow students to consolidate their federal student loans into one new loan with much lower monthly payments.
Low compound monthly payments are available with income-based repayment plans. There are many income-based repayment plans to choose from, but only a few of these plans include loan forgiveness. Standard, graduated, extended, and other repayment plans do not offer loan forgiveness.
Additional resources to help manage other types of unsecured debt, including credit cards and personal student loans
Made My “final” Student Loan Payment…
Students can complete this process on their own or apply for student loan assistance through Golden Financial Services. To self-enroll and get loan forgiveness, go to the next page for instructions. Contact Golden Services for a free consultation at 866-376-9846. Ask a student loan expert.
If you fall behind on your monthly payments, you may not qualify for federal student loan consolidation. First we need to agree on a rehabilitation plan for you.
After you make nine consecutive monthly payments on a loan rehabilitation program, you will graduate and qualify for federal student loan consolidation and repayment programs. Default, delinquent, and collection account flags will be removed from your credit report.
To qualify for an income-based repayment plan and loan forgiveness, students must be experiencing financial hardship. But remember that financial hardship doesn’t have to be overwhelming. Perhaps, after paying all your monthly bills, you won’t have any extra cash left, just enough to get approved.
How To Qualify For A Mortgage With Student Loans In 2024
Financial hardship can include low income, high expenses, or low income. Contact Golden Services Financial Services today and we can run the numbers and determine your eligibility. You can start too