Student Loan Question for Borrowers

[Rebecca Stapler]

We got a notice that our federal SL servicer is switching, and they didn't take out our auto payment this month. I suspect that the transfer takes some time, and they won't be taking payments in the interim -- if you had this happen, how long did it take until they took your payments again?

Every time they don't take a payment, we lose 1 month of PSLF eligibility and $$ from our loan repayment program. And who knows what happens on the other end -- whether they capitalize interest that accrued in the interim. UGH!!

[hoodedfalcon]

When my loans switched to FedLoan (the PSLF servicer), I lost 60 days....erg....

[Rebecca Stapler]

When my loans switched to FedLoan (the PSLF servicer), I lost 60 days....erg....

NOOOOOO!! I mean, we can throw those payments at some other loans, but losing 2 months of PSLF and LRAP is painful.

[hoodedfalcon]

You're telling me! So painful. Excruciating even.

As an aside, I don't know if you are moving over to FedLoan or not, but I've been with them almost a year now and it's been ridiculous. I spent over an hour on the phone with them yesterday because they haven't been allocating my payments correctly. It's been a huge hassle from day one, including the hundreds of dollars of interest that accrued while they wouldn't let me make a payment as they transitioned.

[Rebecca Stapler]

You're telling me! So painful. Excruciating even.

As an aside, I don't know if you are moving over to FedLoan or not, but I've been with them almost a year now and it's been ridiculous. I spent over an hour on the phone with them yesterday because they haven't been allocating my payments correctly. It's been a huge hassle from day one, including the hundreds of dollars of interest that accrued while they wouldn't let me make a payment as they transitioned.

I'm sorry, that really sucks. Our loans are moving over to FedLoan. I guess I have that to look forward too :(  Did they capitalize the interest, or do it correctly and leave it in an administrative forbearance during the transition?

But all the servicers suck. We're currently with ACS, and they completely effed up the IBR setup initially, which cost us 2 months of PSLF / LRAP last year. Add up all the administrative forbearances over 10 years, and we'll probably have to have worked in public service for 12 years to get PSLF.

[hoodedfalcon]

They didn't capitalize the interest, but since it accrued for 60 days without a payment, it set me back about 10 months worth of payments.  I lost a lot of the progress I had made up to that point.

My IBR payment is such that 80% goes towards interest accrued in that month and the remaining 20% is applied to previously accrued interest that I owe (from when I made the mistake and put my loans into forbearance for 2 years while I worked at a very low paying job). My principal hasn't ever changed, since the tiny amount I have leftover barely makes a dent in the outstanding interest previously accrued. I had almost worked my way through the outstanding interest and then the switch to FedLoan put me back, and I am still dealing with it. :(

I really hope your experience is much better than mine.

[Rebecca Stapler]

Crap!

I did find that the transfer has actually happened, which is good news. I set up an online account and no payments are scheduled, but I'm hoping we can make a regular payment before the end of the month so we can get the LRAP and have it count towards PSLF.

I wonder if we just push our normal payment through, whether that will "count" for PSLF? I'm willing to give it a try.

[hoodedfalcon]

I don't see why they can't accept the payment. And since FedLoan is the servicer for  PSLF, they should have a process to handle this sort of situation. Good luck!!!

[Rebecca Stapler]

Thanks! I just paid the normal payment. Crossing my fingers that PSLF and my LRAP will accept it as a normal payment and not have some silly requirement that I be billed for it.

[Chowder]

I'm in the same boat, stan. FedLoan just took over my DirectLoan and I'm waiting to hear from them about setting up an online account. Fortunately the loans I have with them are going to be at the lowest interest rates I owe against and the money can be better used elsewhere in the meantime. Unfortunately all the horror stories I've heard about them are making me consider paying off these loans in full ASAP instead of dealing with nightmarish customer service.

[Rebecca Stapler]

I'm in the same boat, stan. FedLoan just took over my DirectLoan and I'm waiting to hear from them about setting up an online account. Fortunately the loans I have with them are going to be at the lowest interest rates I owe against and the money can be better used elsewhere in the meantime. Unfortunately all the horror stories I've heard about them are making me consider paying off these loans in full ASAP instead of dealing with nightmarish customer service.

If you're not on an income-sensitive repayment plan, then I think the customer service isn't so bad -- because you never have to deal with them! But if you have to certify your income every year, it makes a difference :(  Every year, there is the potential that they will put your loan in administrative forbearance because it takes them 3 months to calculate your new payment.

Of course, paying off loans in full is always a wonderful thing!