Author: Alexis Anderson

Beware! You Don’t Have to Pay for Help With Your Student Loans

Posted on by Alexis Anderson

I bet many of you have seen ads on Facebook that sound something like this:

“Want Student Loan Forgiveness in Two Weeks? CALL NOW!”

“Apply for Obama Loan Forgiveness in 5 minutes!”

Usually, if something sounds too good to be true, then it probably is.  There are countless ads online from companies offering to help you manage your student loan debt…for a fee, of course. While the U.S. Department of Education (ED) does offer some legitimatestudent loan forgiveness programs and ways to lower your student loan payments, they are all free to apply for. Don’t pay for help when you can get help for free!

If you’re a federal student loan borrower, ED provides free assistance to help:

  • lower your monthly payment;
  • consolidate your loans;
  • see if you qualify for loan forgiveness; and
  • get out of default.

Lower Your Monthly Payment

Are you out of a job or not earning very much? The federal government makes it easy for you to switch to a more affordable repayment plan at any time at no cost.

Your loan servicer — the company that works on behalf of ED to collect your payments, respond to your customer service inquiries, and manage other tasks related to your federal student loans — can help you decide which repayment plan best suits you and help you switch at no cost! Not sure how to contact your loan servicer? Find out here.

Before you contact your servicer, check out the Repayment Estimator to get an idea of plans available and see estimated monthly payments.

Consolidate Your Loans

If you have multiple loans that you want to combine, you can apply for loan consolidation through StudentLoans.gov. The application is free, and unlike many student loan debt relief companies, there are no extra processing fees.

Some people find it simpler to group all their student loans into a single loan with one interest rate and one monthly payment. Also, if you received your student loan(s) before 2011, you could qualify for better repayment options by consolidating.

See If You Qualify For Loan Forgiveness

Loan forgiveness is the cancellation of all or some portion of your remaining federal student loan balance. This is sometimes called a discharge.

Many student loan debt relief companies advertise that they can help you get your loans forgiven. But, what most people don’t know is that  they are simply using the ED’s freeresources to help you, but are charging you to do so.

You can find out whether you qualify for loan forgiveness due to your job, disability, the closure of your school, or other circumstances.

Your loan servicer also can help you determine if you qualify for loan forgiveness… at no cost!

Get Out of Default

If your loan is already in default, debt relief companies will target you with online ads, phone calls, and maybe even letters to your home address. By being in default, you’ve already incurred added interest, and you’re subject to collection fees. There’s no reason to add additional fees by signing up with a debt relief company.

(Note: Debt relief companies are different from collection agencies. Here are the collection agencies ED contracts with.)

If you’re in default, contact us immediately and we can help you get your loans back on track.

There are 3 FREE ways to get out of default if you go through the federal government.

How to Protect Your Log-In and Account Information

When student loan debt relief companies offer to manage your loan account, to do so, they will ask you to provide them with your federal student aid log-in information (your FSA ID) or to sign a Power of Attorney. Think about it:  your log-in information is the equivalent of your signature on your student loan documents. If you share this information or sign a Power of Attorney, you’re giving a debt relief company the power, literally, to take any action they choose, make decisions for you, and act on your behalf.

And if the debt relief company collects fees from you, but never actually makes any payments on your behalf, you still will be responsible for those outstanding payments and late fees.

You should protect your FSA ID and account information as securely as you guard your ATM PIN.

What to Do If You Think You’ve Been Scammed

If you think you’ve been scammed by a student loan debt relief company:

  1. Contact your bank or credit card company, and request that payments be stopped.
  2. Change your FSA ID password and contact your servicer and the company you contracted with to revoke Power of Attorney.
  3. Submit a complaint with:
    • The Federal Trade Commission at ftc.gov/complaint
    • The Consumer Financial Protection Bureau (CFPB) by calling 1-855-411-2372. Or, to submit a complaint online, under “Products and Services,” select Debt Collection. Then, choose Get Started. From there, you will be prompted to answer a series of questions to file and submit your complaint.
    • Your state’s Office of Consumer Affairs or Consumer Protection, which usually is within or affiliated with the office of the state’s Attorney General.

Remember, there are no student loan companies affiliated with the U.S. Department of Education that charge fees to help you manage your loan repayment. We have many resources available to help you successfully manage your loans for free. Remember, if you have to pay, then stay away!

Alexis Anderson is an intern at Federal Student Aid’s office of communications. She is a graduate student at The George Washington University studying Strategic Public Relations.

This article originally appeared on blog.ed.gov.

9 Myths About the FSA ID

Posted on by Alexis Anderson

As a graduate student, I‘m no stranger to filing the Free Application for Federal Student Aid(FAFSA®), and when I filed my 2016-17 FAFSA, I was prompted to create an FSA ID—the username and password you need to log in to the FAFSA. I followed the step-by-step instructions, and voila! I easily created my very own FSA ID in no time!

2016-17 FAFSA Login with FSA ID

The FSA ID replaced the Federal Student Aid PIN (check out this blog post explaining why). Students, parents, and borrowers must use an FSA ID to log on to certain Department of Education (ED) websites like fafsa.gov, StudentAid.gov, andStudentLoans.gov. The FSA ID is a more secure way to access and sign important documents without using personally identifiable information (PII).

More than 30 million FSA IDs have been created, and people, like me, have used their FSA ID more than 146 million* times. With any new process, there are some myths floating around about creating and using an FSA ID. Let’s tackle some of those right now…

Myth #1:
It’ll take a long time to create my FSA ID.

On average, it takes about seven minutes to create an FSA ID. If you previously had a Federal Student Aid PIN, you can link it to your FSA ID; this will help eliminate a few steps in the process. Federal Student Aid (FSA) has a variety of resources, like this helpful video, that walks you through each step of creating an FSA ID.

Myth #2:
Only students need to create an FSA ID.

If you are a dependent student, then your parent will need an FSA ID, too (if he or she will sign the FAFSA electronically). That’s because you will need to provide your parent’s information on your FAFSA and your parent, will need to sign the FAFSA, as well. But here is something very important—your parent must create his or her own, separate FSA ID. Your parent shouldn’t use your FSA ID, and you shouldn’t create an FSA ID for your parent.

If you’re not sure if you’re a dependent student, visit StudentAid.gov/dependency.

Myth #3:
It’s okay to let someone else create or use my FSA ID.

Not okay. Each individual person needs to create his or her own FSA ID. A Parent should NOT be creating an FSA ID for their child, and a student should NOT be creating an FSA ID for his or her parent. For example, if a parent tries to create both the parent’s and child’s FSA ID, it’s easy to mix up information like Social Security numbers, dates of birth, and usernames and passwords. Because we verify your information with the Social Security Administration (SSA), it’s crucial that this information be correct. Also, if someone else creates your FSA ID, how will you know the answers to your challenge questions if you need to retrieve a lost username or password?

Also, FSA IDs are used to sign legally binding documents, so giving someone access to your FSA ID is like allowing them to forge your signature. Be sure to create your own FSA ID, and save yourself the trouble.

Myth #4:
I need an e-mail address to create an FSA ID

You do NOT need an e-mail address to create an FSA ID. If you don’t have an e-mail address, you can leave this field blank. Adding your e-mail address is strongly recommended, though, because once your e-mail address is verified, you can enter it instead of your username when you log in. You can also use your e-mail address to retrieve your forgotten username or password or to unlock your account. It’s easy to update and verify your e-mail address by clicking “Edit My FSA ID.”

Edit My FSA ID Tab

Myth #5:
As a parent, I can use the same e-mail address for both my FSA ID and my child’s.

An e-mail address cannot be used with more than one FSA ID. If you choose to provide an e-mail address when creating your FSA ID, the student will need to include his or her e-mail own address, and the parent will need to include his or her own e-mail address. If you don’t have an e-mail address, you can leave the field blank.

Myth #6:
I need an FSA ID to fill out the FAFSA.

The fastest way to sign and submit your FAFSA is to use an FSA ID. That said, if you or your parent don’t have an FSA ID, you can still submit the FAFSA. If you fill out the FAFSA online, but don’t have an FSA ID, you can choose the option to submit your FAFSA without signatures, and print and mail a signature page. If you can’t fill out the FAFSA online, you have other options.

Students without access to a computer can receive assistance from a wide range of college access organizations, like the National College Access Network (NCAN); a student can also visit a local library, use a computer at school, as well as get help from school counselors.

Myth #7:  The Social Security Administration has to verify my information before I can use my FSA ID.

If you’re filling out a FAFSA for the first time, you can use your newly created FSA ID to sign and submit your FAFSA right away. But, if you need to submit a renewal FAFSA or make corrections after you’ve submitted your FAFSA—and you did NOT link your PIN when you created your FSA ID—you first have to wait for the SSA to verify your identity. The verification process takes one to three days.

Make sure to enter your information exactly as it appears on your Social Security card to avoid delays. Once your information is verified, you can use your FSA ID to submit your renewal FAFSA, make corrections, access your loan history, and a host of other things.

If you’re a parent, you never have to wait for the SSA match to sign your child’s FAFSA. However, if you sign the FAFSA when your SSA match status is listed as “pending” and it later returns “no match,” we will remove your signature from your child’s FAFSA. If that happens, you will either need to resolve the conflict with the SSA and sign electronically again, or print and mail a signature page.

Myth #8:
Confirming my e-mail address can take up to 24 hours.

You should receive your e-mail confirmation within three minutes. Although, your e-mail account’s spam filter could delay your confirmation. It’s a good idea to add the FSA ID e-mail address—FSA-ID@ed.gov—to your address book to make sure you get your confirmation.

Myth #9:
I forgot my password, and it’s going to take 30 minutes to reset it.

You only have to wait 30 minutes if you reset your password using your challenge questions.

But, the easiest way to reset your password is to enter your verified e-mail address. Once you do, you can use your FSA ID immediately.

There are lots of resources online to help you create and use your FSA ID; visit StudentAid.gov/fsaid for more information! In no time, you’ll have your very own FSA ID, too!

* These figures are accurate as of April 11, 2016.

 

Alexis Anderson is an intern at Federal Student Aid’s office of communications. She is a graduate student at The George Washington University studying Strategic Public Relations.