Online Tool Can Help Students Resolve Delinquent and Defaulted Loans

USA Funds^® reminds financial-aid professionals that borrowers who are delinquent or in default on their student loans have an online tool that borrowers can use to determine their loans’ status and explore repayment options.

Since USA Funds launched www.loanpaymentsolutions.org in 2006, nearly $4 million in delinquent student loans have been resolved through action borrowers took on the Web site.

“When student-loan borrowers reach out to us, we want to communicate with them in the method they prefer,” says Eric Johnson, sales, marketing and client-services manager in debt-management solutions for USA Funds’ guarantor-servicer. Many borrowers would rather take advantage of self-service options than speak to an agent, Johnson says.

“Students tend to feel more comfortable resolving issues on their own, and with this Web site, they have access to the information they need 24 hours a day, seven days a week,” he says.

When students log on to www.loanpaymentsolutions.org, they can:

• Review the status of their Federal Family Education Loan Program loans that are guaranteed by USA Funds and certain other guarantors.
• Receive advice on how to avoid additional costs, resolve their delinquencies, and stay out of default.
• View and print the addresses, phone numbers and fax numbers for their lenders and servicers.
• Make a promise to pay and bring their loans current within 30 days.
• Learn if they qualify to temporarily postpone their loan payments through deferment.
• Receive instructions for requesting forbearance from their lenders if they don’t qualify for a deferment.
• Determine if they can consolidate their loans, and use online calculators to estimate monthly payments on a consolidation loan. 
• Learn the steps they need to take to get out of default, restore their credit, and request letters, documents and contracts, and to obtain information about organizations that can help them resolve their default.

Borrowers also can download forms including deferment forms and consolidation-loan applications, use an online tool to calculate their eligibility for an economic-hardship deferment based on their income and payment amount, and file online for an unemployment deferment or economic-hardship deferment.

“This Web site was designed with student-borrowers in mind,” says Michelle Beckley, director of systems administration. “Everything they need is in one place.”

Since June more than 700 delinquent borrowers have used the Web site, and 285 of those borrowers brought their student-loan accounts current — resolving $3.97 million in delinquent loans.

“We are pleased with the initial results and would like to see more borrowers directed to the site,” Johnson says. “We always look for long-term solutions to help borrowers and to prevent the loans from falling back into delinquency in the future.”

Loan-Payment Solutions is one of an array of services and products that USA Funds offers to prevent loan defaults. Among the other default-prevention tools from USA Funds is an insert that schools can include in mailings to delinquent borrowers. The insert, “Online Student-Loan Assistance — Resolve Your Payment Problems,” is available for ordering online. You will need Adobe Acrobat Reader to access a sample of the publication from the USA Funds Web site.