PETALUMA, Calif., April 27, 2018 /PRNewswire/ -- Every federal student loan borrower is assigned a loan servicer for their repayment period. The federal student loan program has not remained static throughout the years, though, and as the program shifts, servicers are hired or end their tenure as subcontractors of the Department of Education. This means that borrowers' accounts can get shifted around as things shake up. These changes are not always smooth sailing for borrowers. Brandon Frere, CEO of Frere Enterprises and an advocate for student loan borrowers, wants to alert borrowers that a change in student loan servicer may result in some bumps in repayment.
"Ideally, there should be no issues when borrowers are switched from one servicer to another, but that's not always the case," said Frere. "Even though borrowers don't have a choice who their servicer is, it's important for borrowers to be on the lookout for issues with servicer changes."
Frere encourages borrowers to always pay attention to correspondence from their servicer, for one, as servicers should be in contact before a change. Borrowers who log into their servicer accounts to see a balance magically disappeared likely haven't been visited by a student loan fairy godmother, but instead their servicer switched without them knowing — something got lost in the mix.
But borrowers who know their servicer will be changing should still be vigilant about their accounts. For instance, if a borrower has auto-pay set up with their current servicer, this may not seamlessly translate over to the new servicer. Borrowers who do not want to risk losing a payment should make sure that their auto-pay remains in place, re-instate it as fast as possible or simply make sure that a manual payment goes through.
"It's also key that borrowers make sure their servicer keeps them in the right repayment plan," cautioned Frere. "If they are in an income-driven repayment plan with one servicer, they should be able to remain in that plan as they cross over to the new servicer. It's vital that borrowers stay ahead of these details."
Losing out on a payment or falling out of a payment plan can trigger unhappy results, like higher monthly payments or capitalization of interest.
"Borrowers deserve to know when their servicer is changing and they deserve to have a smooth transition," said Frere. "Borrowers should still be aware that they can potentially get mixed up in a rocky transition to their new servicer."
About Frere Enterprises Brandon Frere is an entrepreneur and businessman who lives in Sonoma County, California. He has designed and created multiple companies to meet the ever-demanding needs of businesses and consumers alike. His company website, www.FrereEnterprises.com, is used as a means to communicate many of the lessons, fundamentals and information he has learned throughout his extensive business and personal endeavors, most recently in advocating on behalf of student loan borrowers nationwide.
As experienced during his own student loan repayment, Mr. Frere found out how difficult it can be to work with federally contracted student loan servicers and the repayment programs designed to help borrowers. Through those efforts, he gained an insider's look into the repayment process and the motivations behind the inflating student loan debt bubble. His knowledge of the confusing landscape of student loan repayment became a vital theme in his future endeavors, and he now uses those experiences to help guide others through the daunting process of applying for available federal repayment and loan forgiveness programs.