EL DORADO HILLS, Calif., June 1, 2017 /PRNewswire/ -- Betsy DeVos recently revealed her plan to switch to a single servicer model for collecting federal student loan payments beginning 2019, when the current servicer contracts expire. Ameritech Financial, a document preparation company specializing in aligning clients with Department of Education repayment programs, is prepared for any change to the way federal student loans are serviced and will continue to work hard to help borrowers get into repayment plans through the Department of Education and avoid defaulting.
According to DeVos, the changes to the servicer contract will help improve customer service and borrower protections by reducing confusion about deadlines, requirements and contradictions across the different servicers. Rescinding Obama-era memos last month that encouraged servicers to help borrowers avoid default was the first step toward this new single-servicer contract.
The new servicer contract is expected to save $130 million in the next five years.
Among the critics is Rohit Chopra, former student loan ombudsman at the Consumer Financial Protection Bureau. He says the changes may "increase profits for the industry, but may do little to tame the high levels of default in the program."
"Defaulting is the most damaging thing borrowers can do with their student loans," says Tom Knickerbocker, Executive Vice President of Ameritech Financial. "It damages their credit in ways that are very difficult to recover from."
One way the new contract cuts costs is by removing a specialist whose job is to help borrowers prevent defaulting on their loans. Servicers will also no longer be required to remind borrowers on income-driven repayment plans of upcoming deadlines to re-enroll. Critics of the new contract argue that these reminders are necessary for many who rely on the lower payments from the income-driven plans to stay afloat.
In the past, a single servicer was responsible for collecting federal student loan payments. Robert Shireman, former deputy undersecretary of education under Obama, recalls a lack of accountability in the old system. To keep the servicer accountable and to help lighten the load, the new contract allows the servicer to hire subcontractors, whose performance directly affects the performance of the servicer.
"We're not sure what the new contract will mean in terms of communicating with borrowers, but we're ready to support our clients in any way," explains Tom Knickerbocker.
"At Ameritech Financial, we're here to help borrowers get all the information they need to make an informed decision relating to their personal financial situation," says Knickerbocker. "We help our clients enroll in the repayment plan that will benefit them most. This will always be our goal, no matter how the new servicer contract turns out."
About Ameritech Financial
Ameritech Financial is located in El Dorado Hills, California, right next to the California state capitol, Sacramento. Ameritech Financial has already helped thousands of people with financial analysis and student loan document preparation for federal student loan forgiveness programs offered through the Department of Education.
Each representative on the phone is certified through the International Association of Professional Debt Arbitrators (IAPDA) and has received the Certified Student Loan Professional certification through Americans for Student Loan Relief (AFSLR).
Ameritech Financial prides themselves on their exceptional 24/7 Customer Service.
To learn more about Ameritech Financial, please contact:
1101 Investment Blvd. Ste. 290
El Dorado Hills, CA 95762
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SOURCE Ameritech Financial