The Many Shades of Student Loans

Many moons ago, I bought a house with my now ex-husband. By the end of that first year, our mortgage had hopped from one bank to another to another, like a hot potato. That was the world of financing – juggling money to make more money.

Fast forward to today. I currently don’t have a mortgage, but I do have student loans. A few years ago I realized I needed to go back to college in order to be able to make it on my own. Grants, scholarships, and many loans later, I am now a high school English teacher. Not a bad trade-off, right? Currently, some of my student loans are being serviced by FedLoan Servicing and others are now serviced by Navient after they’ve been bounced around a couple of times (like a mortgage). So far, I haven’t had many issues. The customer service has been very cooperative in helping me navigate payment plans as well as answering any questions I’ve ever had about my student loans. However, Navient has received its share of complaints over the years and recently has been involved in a lawsuit for negligence and unethical practices – not exactly the type of behavior that inspires confidence in a loan holder (Google them). That was in January.

Today, I received a note from Navient stating that the Department of Education was transferring my loans from Navient to FedLoan Servicing. A safe assumption would be that action is a direct result of the pending lawsuit. So now, all my loans are under one loan servicer that has had its own share of complaints (yeah, Google them, too).

I’m not sure what all that means outside of conjecture. I’m assuming all will be made clear here in the next few months. On the one hand, it’s nice to have all the little loans combined under one umbrella and away from the craziness of what is now Navient. On the other hand, I’m not entirely sure I trust that umbrella.

Why don’t I transfer them all to a private loan, you ask? Well, the main reason is a neat little program called the Public Service Loan Forgiveness Program. If I make regular payments on my loans for 10 years as a teacher (some restrictions apply), then the remainder of the loan will be forgiven at the end of that 10-year period.

THAT is all getting ready to change under the new leadership of Betsy DeVos. The forgiveness program is getting ready to go away along with some other major changes to student loans:

The $1.3 trillion student loan problem facing Betsy DeVos

Also, the Public Service Loan Forgiveness Program has had its own share of issues, one of which involve lack of clarity on whether or not your particular job qualifies for the loan forgiveness program. This issue wouldn’t be much of a problem except that it’s rearing its ugly head after participants have already been approved and have been certifying each year:

Student Loan Forgiveness Program Approval Letters May Be Invalid, Education Dept. Says

All of this combined doesn’t exactly inspire confidence in the system. My hope is that the loan forgiveness program is stepping aside to make room for a new and improved loan forgiveness program of a different name and that everything will settle down soon. If not, I predict a lot of banks are going to be receiving an influx of student loans with the promise of lower interest rates and a more stable environment – me included.