Student Loans Knowledge Base
Expand Your Student Loan Knowledge
Need additional information for clients with student loan debt? This article includes facts and information that will help you to understand the nuances of your client's college debt.
Federal Student Loans
Federal student loans are made by the government, with terms and conditions that are set by law, and include many benefits such as a fixed interest rate, income driven repayment plan options and eligibility for Public Service Loan Forgiveness (PSLF) not typically offered with private loans.
Private Student Loans
Private loans are made by private organizations such banks, credit unions, and state-based or state-affiliated organizations, and have terms and conditions that are set by the lender. Private student loans are generally more expensive than federal student loans.
A loan servicer is a company that is assigned to handle federal student loan debt on the government's behalf. The loan servicer will assist your client with tasks related to your federal student loans. Client's can contact the loan servicer to obtain standard 10 year payment, new borrower status information or any relevant information. If the client's circumstances change at any time during their repayment period, the loan servicer will be able to help. If the client is unsure of their loan servicer look for the most recent communication from the entity sending you bills for your loan payments.
Loan Servicer Contacting Information
Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.
|1-800-621-3115 (TTY: 1-877-825-9923 for the deaf or hard of hearing)|
Student Loan Repayment Plans
Student Loans can be repaid in a variety of different methods depending on the client's situation. The different plans may seem similar, but each has distinct pros and cons. Note that if the client didn't choose a repayment plan, the loan servicer will automatically place them on the Standard Repayment Plan.
Income-driven repayment (IDR) plans are designed to make student loan debt more manageable by reducing the monthly payment amount. If clients need to make lower monthly payments or if their outstanding federal student loan debt represents a significant portion of their annual income, one of the following income-driven plans can be used. After 20 to 25 years of steady repayment, the remaining balance is forgiven.
|Income Driven Repayment Plan||Payment Amount|
|REPAYE||Generally 10% of discretionary income|
|PAYE||Generally 10% of discretionary income|
|IBR|| Generally 10% of discretionary income if you're a new borrower on or after 7/1/2014, but never more than the 10-year Standard repayment plan amount|
Generally 15% of discretionary income if you're not a new borrower on or after 7/1/2014, but never more than the 10-year Standard repayment plan amount