Federal student loans are in a bit of a state of chaos right now.  After a three year pause, interest started accruing again on September 1^st, and payments are starting this month for anyone who was in repayment before the pandemic, and also for anyone who stopped attending school from March 2020 through April 2023.  That is a LOT of student loan borrowers.  All going into repayment at exactly the same time.

To keep things extra confusing, a lot of borrowers have had their loans shuffled around to a different loan servicer (the company that handles the management and collection of the debt) during the pause.  Several of the old familiar loan servicers, including Great Lakes, AES, and Navient (AKA Sallie Mae), have gotten out of the federal loan servicing business.  There are several new players in the federal loan servicing space including Maximus, Aspire, Ascendium, and bunch of other companies I hadn’t heard of before recently.  So we have new servicers at a time when millions of borrowers are entering repayment for the first time.

I’ve heard from several currently enrolled students that their in-school deferments have not yet processed for this year.  And that doesn’t surprise me at all.  The loan servicers are without question overwhelmed.  And the in-school deferments are not their top priority right now.  But I do have confidence that the servicers will eventually get these deferments processed retroactively to the start of the fall semester.  So if you are in school and receive notice that you have a payment due, what should you do?  I can’t believe I’m saying this, but you should ignore it.  The school has sent your enrollment verification.  The loan servicer has access to it.  And the deferment will eventually be processed.  If there is a mis-labeled missed payment jammed in there, there are protections in place so you will not suffer any consequences for this “missed payment.”  So, believe it or not, you should ignore it.

I’ve heard reports that wait times to get through to a loan servicer on the phone are hours long.  And nobody wants to be on hold for that long.  So what can you do to make sure everything is in order?  There are several things you can do that don’t involve calling the loan servicer.

1. First you should make sure you know who your loan servicer is, just in case it changed during the pause.  You can always find this information at http://studentaid.gov in the “My Aid” section.
2. If you have not yet established an online account with your loan servicer’s web portal, you should do so.  This portal should be able to provide the most up-to-date information about your student loan account.  This will be much more efficient than trying to get through to a human on the phone.
3. If you have general questions about repayment plan options or repayment strategies, there are options outside your loan servicer.  You can reach out to the financial aid office at your school.  If you are a law school graduate, you can also get help from AccessConnex.
4. If you have specific questions about your student loan, you may be doomed to wait on hold to talk to your loan servicer, but this should be a last resort after you try to work through options on their web portal.

This is a less than ideal time to be a student loan borrower.  The system is not working at its best.  But your school’s financial aid office will always be your ally in working through the process.