Master Your Federal Student Loans: Servicer Tips, Hardship Options, and Default Prevention

Understanding Your Loan Servicer and How to Contact Them

Your loan servicer is the company that handles billing and customer service for your federal student loans. Knowing who your servicer is and how to reach them is the first step in effective loan management. You can find your servicer by logging into your Federal Student Aid account at StudentAid.gov.

Each servicer has its own contact procedures, including phone numbers and online portals. Always use the contact information provided on your billing statement or the official Federal Student Aid website. If your servicer changes, you will receive a notification with the new contact details.

How to Update Your Personal Information and Payment Details

Keeping your personal information and payment details up to date is essential to avoid missed payments and communication issues. You can update your address, phone number, email, and bank account information through your servicer's online portal or by contacting them directly.

If you change jobs or have a change in income, update that information as well, especially if you are on an income-driven repayment plan. Failure to update your contact information can lead to missed notices and potentially default.

Requesting Deferment: Eligibility and Application Steps

Deferment is a period during which you can temporarily postpone making payments on your federal student loans. During a deferment, interest does not accrue on subsidized loans, making it a more favorable option than forbearance. Deferment is not automatic; you must apply through your servicer.

Eligibility for deferment depends on the type of deferment, and the specific requirements vary. Contact your servicer to request the appropriate deferment form and learn about eligibility requirements.

• Interest does not accrue on subsidized loans during deferment.
• You must submit an application form to your servicer.
• Deferment options vary; ask your servicer about available types.

1. Contact your servicer to ask about deferment options.
2. Download the correct deferment form from your servicer's website.
3. Complete the form and gather any required supporting documentation.
4. Submit the completed form and documents to your servicer.
5. Keep making payments until you receive written approval.

Sources: Higher Education Servicing Corporation (HESC)

Requesting Forbearance: Types

Forbearance is a period during which you are allowed to temporarily postpone making payments, extend the time for making payments, or temporarily make smaller payments than scheduled. Unlike deferment, interest continues to accrue on all loan types during forbearance, and if you do not pay the interest, it may be added to your loan balance (capitalized).

There are two main types of forbearance: mandatory and discretionary. Mandatory forbearance must be granted if you meet certain eligibility criteria and provide supporting documentation. Discretionary forbearance is granted at the servicer's discretion.

Mandatory forbearance may be available for situations such as when your monthly federal student loan payments are 20% or more of your monthly income, or for other qualifying circumstances like AmeriCorps service, National Guard duty, or medical/dental internships. Discretionary forbearance is typically granted for up to 12 months at a time, with a cumulative limit of 3 years.

• Interest accrues during forbearance on all loan types.
• Mandatory forbearance is available for specific situations, such as when your monthly federal student loan payments are 20% or more of your monthly income.
• General or discretionary forbearance is typically granted for up to 12 months at a time, with a cumulative limit of 3 years.
• Before requesting forbearance, consider an income-driven repayment (IDR) plan, which can offer payments as low as $0 and count toward loan forgiveness.

1. Identify which type of forbearance you may qualify for.
2. Download the correct forbearance form from your servicer's website.
3. Gather supporting documents, such as documentation of income and loan payments.
4. Submit the form and documents to your servicer.
5. Continue making payments until you receive written approval.

Sources: U.S. Department of Education, Federal Student Aid, Higher Education Servicing Corporation (HESC), National Consumer Law Center, Highway Benefits

Mandatory Forbearance: Student Loan Debt Burden

If the total amount you owe each month on your federal student loans is 20 percent or more of your monthly income, you may be eligible for a mandatory forbearance for up to three years. This forbearance can be granted for up to 12 months at a time.

To apply, you must provide documentation of the most recent monthly payments due on all your federal student loans and documentation of your most recent total monthly income from all sources. If you have no income, you must show that as well. If your loan payments are due less frequently than monthly, a proportional share of the payments is used to determine the equivalent monthly payment amount for the 20% income test.

• Eligibility: monthly federal student loan payments are 20% or more of monthly income.
• Maximum duration: up to three years total, with 12-month increments.
• Required documentation: proof of monthly payments and income.

1. Gather documentation of your most recent monthly loan payments for all federal student loans.
2. Gather documentation of your most recent total monthly income from all sources, or a statement if you have no income.
3. Complete the appropriate forbearance request form, using the student loan debt burden category.
4. Submit the form and documentation to your servicer.

Sources: U.S. Department of Education, Federal Student Aid, National Consumer Law Center

Options for Avoiding Default: Income-Driven Repayment, Deferment, Forbearance, and Consolidation

Default has serious consequences, including damage to your credit and possible wage garnishment. To avoid default, it is crucial to explore all available options. Time spent on an income-driven repayment (IDR) plan can count toward loan forgiveness, which is not the case with forbearance.

Deferment and forbearance are temporary solutions for short-term hardship. They can help you avoid missing payments, but they do not offer the long-term benefits of IDR. Loan consolidation can simplify repayment by combining multiple federal loans into one loan, but it may not lower your interest rate.

If you are struggling, contact your servicer immediately to discuss your options. Do not ignore your loans; help is available.

• Deferment and forbearance are temporary pauses, but interest may accrue depending on loan type.
• Consolidation can combine multiple loans, but it does not reduce interest rates.
• Contact your servicer as soon as you anticipate difficulty making payments.

Sources: National Consumer Law Center

What to Do If You Are Already in Default

If you are in default, you can take action to resolve your loans. The U.S. Department of Education has restarted collections on defaulted federal student loans as of May 5, 2025, so it's important to address default promptly.

One key resource is MyEDDebt.ed.gov, where you can set up an account to view your loan amount and payment history, see options for resolving your loans, access forms, make payments, and take other actions. This is the official portal for managing your defaulted loans.

• Collections have resumed as of May 5, 2025.
• MyEDDebt.ed.gov provides access to loan details and resolution options.

1. Log in or create an account at MyEDDebt.ed.gov.
2. Review your loan information and available options.
3. Discuss options for resolving your default with a specialist.
4. Choose the option that fits your financial situation and follow the steps provided.

Sources: U.S. Department of Education

Common Scams Targeting Student Loan Borrowers

Scammers often target student loan borrowers, promising loan forgiveness or debt relief for a fee. Remember: there are no fees to apply for deferment, forbearance, or income-driven repayment plans. You can get free help from your loan servicer or from a U.S. Department of Education-approved counselor.

Watch for red flags such as unsolicited calls offering immediate loan forgiveness, requests for your Federal Student Aid (FSA) password, or pressure to act quickly. Never share your FSA ID login credentials with anyone. If you suspect a scam, report it to the Federal Trade Commission.

• Do not pay for help with deferment, forbearance, or IDR applications.
• Never share your FSA ID or password with anyone.
• Be suspicious of unsolicited offers of loan forgiveness.
• Report scams to the FTC.