On December 22, 2021, the U.S. Department of Education announced an extension of the administrative forbearance through May 1, 2022. The announcement does not indicate that this will be the “final extension” of the forbearance, which has lasted since March 2020. As a result, interest accumulation and payments will resume in May 2022 for the first time in over two years.
We are still waiting for more information about how the Department of Education plans to handle the transfer of loans from one of their largest servicers, FedLoan Servicing. An announcement on FedLoan’s website signals that the “transition” period could be as long as a year. “In the coming months, we [FedLoan Servicing] will be working with Federal Student Aid (FSA) to conduct a smooth transition of your loans to a different servicer over the next year. FedLoan Servicing will continue to service all loans until they are transferred to another FSA-designated servicer.”
We anticipate new contracts with new loan servicers and have seen indications from the U.S. Department of Education that there are plans for a “’Next Gen’ platform.”
Rest assured, your team at Spaugh Dameron Tenny will continue to monitor the changes with the student loan industry.
Will Koster is a financial planner with Spaugh Dameron Tenny. The experience of losing his father as a teenager helped Will find his calling in financial planning. He has a passion for working with dentists and physicians, helping them navigate their unique wealth creation journeys. In addition, Will has become the in-house expert on student loans after completing the Certified Student Loan Professional® training.
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