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;
- Consolidate Your Loans;
- See If You Qualify For Loan Forgiveness; and
- Get Out of Default
Lower Your Monthly Payment
Are 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 permanent disabilities.
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.
Get Out of Default
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 company.
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.
And if 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 debt.
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.
April Jordan is a senior communications specialist at Federal Student Aid.