KNOW YOUR RIGHTS: Federal Student Loans
Know Your Rights is a Legal Aid Society educational series that provides helpful information on a variety of relevant topics. This issue, we talk FEDERAL STUDENT LOANS!
Here’s what you need to know:
Written by Legal Aid Society Attorney Brian Fields
Navigating the bureaucracy around federal student loans can be complex. With federal student loan payments resuming soon, it’s important to have the information you need to stay informed and keep your loans in good standing. Below are answers to some important questions about federal student loans as well as some of your rights as a federal student loan borrower. A list of resources in this article has been compiled at the bottom, as well as contact information for assistance on your student loan matters.
Question: When are payments on federal student loans set to resume and what do I need to know?
Student loan interest will resume starting on September 1, 2023, and borrowers will have to restart payments in October. The U.S. Department of Education will notify borrowers before payments restart. Loan servicers should also provide borrowers with billing statements or notices at least three weeks before their first payments are due. It’s important to ensure you have access to your federal student loan account before payments resume by checking your account at studentaid.gov and that all your contact information is current. Also make sure that you can log on to your student loan servicer’s website and that your contact information is up-to-date and accurate. If you cannot afford your student loan payment, you may wish to consider enrolling in an income driven repayment plan (IDR plan). An IDR plan bases the size of your payments on your income and family size and may make your payments more affordable. If your federal student loan is in default prior to March 13, 2020, you have the option of enrolling in the U.S. Department of Educations’ Fresh Start program to get your student loan moved out of default through their easy and no-cost via phone, email, or mail at the link here.
Question: What is the difference between federal student loans and private student loans?
Federal student loans are loans that are made through special government programs. These programs include the Direct Loan Program, Perkins Program, or Federal Family Education Loan (FFEL) Program. While all new federal student loans since 2019 have been given out through the Direct Loan program, many borrowers still have other types of federal loans including FFEL and Perkins Loans, as well as other types of loans often issued by private lenders or schools. Private student loans are issued by a bank, lender, or other non-governmental institution. Private loans are not backed by the federal government and are made outside of the federal government programs, with different rules and regulations applying to the different types of loans. Your rights and responsibilities as a borrower vary depending on the type of student loan, so it’s important to know what types of student loans you have.
Question: How do I find out what type of student loans I have?
You can check if you have federal loans on Federal Student Aid, an Office of the U.S. Department of Education, by setting up an account on https://studentaid.gov/. All federal loans will be listed here, even if they are serviced by another entity. Unlike federal loans, there isn’t a central place that stores all of your private student loan information. However, your private student loans should be listed on your credit reports. One way to tell if you have a private loan and to find your loan information is to look at any loan statements, collection letters, emails, or loan agreements you have. Common private student loan lenders include SoFi, Earnest, LendKey, Discover, and Citizens, but there are many other lenders that offer private student loans. Sallie Mae, Navient, and Mohela are federal loan servicers but also offer private student loans, which can be confusing for borrowers who have federal student loans that are serviced by these companies. You can get a free copy of your credit report once a week from each of the major credit reporting agencies at annualcreditreport.com until the end of 2023.
YOUR RIGHTS
While you have many rights as a federal student loan borrower, below are some of the important rights to know as we prepare for the end of the federal student loan payment pause:
You have the right to accept all, some or none of the federal student loan funds offered to you.
You have the right to be provided with information from the loan holder regarding payment schedules, interest rates, fees, loan balances, and payment options.
You are entitled to a copy of your master promissory note (which outlines the terms and conditions of your student loan) at any time, including before the student loan has been officially disbursed. You can request copies of your master promissory notes or view sample promissory notes for federal loans here.
You have the right to temporarily stop payments with deferments or forbearance if you meet certain qualification criteria. While not all criteria will guarantee you a deferment or forbearance, student loan servicers are required to stop payments if certain criteria are met. You can find the criteria for forbearance and deferment options listed here.
You have the right to request a type of repayment plan different from the one you are currently on. For many borrowers, income driven repayment is an option that can get payments as low as $0 a month. Borrowers cannot switch onto income driven repayment plans while loans are in default, so borrowers interested in switching plans should get loans removed from default through the Fresh Start Program first. Information about different types of payment plans is available here.
Borrowers have the right to loan cancellation or discharge in certain situations. Programs such as Public Service Loan Forgiveness, Total and Permanent Disability Discharge, Teacher Loan Forgiveness, Income-Driven Repayment Forgiveness, and various other types of administrative discharges are available for many eligible borrowers. Information about some of the types of student loan discharges available can be found here.
Borrowers have the right to have discharged loans excluded from their federal tax bill through December 31, 2025.
If you have an issue with your federal student loans and need representation or need assistance navigating the process of loan discharge/plan changes, please click here or call 502.584.1254 to apply for Legal Aid Society services.
List of Resources
Contact Information for Federal Student Loan Servicers: https://studentaid.gov/manage-loans/repayment/servicers
Information regarding Master Promissory Notes for federal loans:
To get your federal loan removed from default through the Fresh Start Program:
https://studentaid.gov/announcements-events/default-fresh-start
For information on forbearance and deferments of federal student loans:
https://studentaid.gov/manage-loans/lower-payments/get-temporary-relief/forbearance
To look at federal payment plan options or change your payment plan:
https://studentaid.gov/manage-loans/repayment/plans/income-driven
To see a free copy of your credit report from the major credit reporting agencies:
For information on various types of federal student loan discharges available:
https://studentaid.gov/manage-loans/forgiveness-cancellation