The New Year Brings More Student Loan Changes

Melissa Maichle .

When last we visited the topic, the oft extended federal student loan repayment pause provided by the CARES Act in March 2020 was set to expire on January 31, 2022 but before it did, the Biden administration extended it once more through April 30, 2022. The reason shared with the media is that so many borrowers are still struggling with pandemic-related financial challenges and are not ready to enter repayment. However, another contributing factor may be the need to transition millions of borrowers to new servicers since three, Federal Loan Servicing, Navient and Granite State Management & Resources, announced last fall they would not be renewing contracts.

Federal Loan Servicing has agreed to stay in the program for one more year and has already begun transitioning borrowers to the remaining servicers. The Higher Education Loan Authority of the State of Missouri (MOHELA) will take over responsibility for the Public Service Loan Forgiveness program and TEACH Grant recipients. Navient has begun transitioning its loans to AidAdvantage, the servicing division of Maximus. To ease the transition, Maximus has sub-contracted Navient for 90 days and will hire 800 Navient employees permanently.

Between these changes and the previously announced temporary expansion of PSLF eligibility, scammers are more likely than ever to try to take advantage of student loan borrowers. They are using every avenue –from phone calls to texts — to contact vulnerable borrowers. Here’s a reminder to share with your students and alumni who may be targeted:

  • There are no fees associated with deferment/forbearance/forgiveness/cancellation of federal student loans. If you are asked to pay to qualify for one of these benefits, it’s likely a scam.
  • You cannot apply for loan forgiveness over the phone, by email or via text – if the process outlined is ‘quick and easy’ it’s likely a scam.
  • If the program is being referred to as “Biden Loan Forgiveness” or “CARES Act Loan Forgiveness,” it is likely a scam.
  • If the representative asks for personal information such as your FSAID, Social Security Number or bank account number, it is likely a scam.

Individuals who think they may have interacted with one of these companies should first contact their legitimate loan servicers so their loan accounts can be monitored appropriately. Additionally, the situation should be reported to the Federal Trade Commission. Finally, if any personal information was shared with a scammer, either review your credit report with all three bureaus regularly or invest in credit monitoring.

Providing your students with this information during exit counseling will make a big difference in their ability to weather these changes and those that may come in the future. The Higher Education Assistance Group can help ensure your loan counseling programs are compliant and effective — contact us at to speak with a regulatory expert.