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Student-loan borrowers will start to see 'improvements' to the repayment process starting this month

Mar 6, 2024, 21:41 IST
Business Insider
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  • The Education Department told borrowers they will begin to see "improvements" to loan servicing.
  • The updates include streamlined website branding and an easier log-in process for repayment.
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Millions of student-loan borrowers might soon see improvements to the platforms they use to pay off their debt.

Over the past few days, President Joe Biden's Education Department sent emails to federal borrowers informing them of "a new loan servicing environment" that includes updates to improve data security and scam detection, according to a copy of the email reviewed by Business Insider.

Federal Student Aid also posted an announcement on its website with further details on the platform changes. Specifically, the first few changes beginning in March will streamline all federal servicer websites and email addresses to end in ".gov," along with an update to each servicer's website to include branding for the Federal Student Aid office. This is likely an effort to prevent scams by making it clear to borrowers that the servicer works with the federal government.

Additionally, Federal Student Aid said it'll implement a new log-in process for borrowers "later in 2024" to allow them to use their studentaid.gov username and password to log into their servicer's website as well, eliminating the need for multiple log-in credentials. It'll ensure that borrowers can detect whether information is coming from an Education Department website to protect them from scams and reduce disruptions across servicing platforms.

"You will see more improvements when managing and repaying your loans in the coming year," the email to borrowers said.

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The guidance noted that some borrowers who are managed by federal servicer MOHELA will not see any of these changes until this summer because the company is moving its borrowers' accounts to a new servicing platform — a process that likely won't be completed until the summer.

These updates come as some borrowers continue struggling with the return to payment. Borrowers began receiving bills in October after an over three-year payment pause, and many of them have encountered challenges managing the transition — facing issues like inaccurate billing statements and technical errors that prevented them from even logging into their servicer's website to make payments.

The Education Department has vowed to bolster oversight over servicers, releasing an accountability framework at the end of December that outlined how it would ensure servicers are fulfilling their contractual obligations.

The department has also previously released guidance on preventing scams in the federal student-loan servicing industry, clarifying that repayment assistance from the government will always be free, and borrowers should not pay a company to receive help with the department's forgiveness or repayment programs.

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