Know Your Loan / Know Your Options
Student loan interest accrual resumes September 1, 2023. Loan repayments resume October 1, 2023.
Student loan repayments will resume on October 1, 2023. Make sure to check your email and postal mail for student loan payment updates from your loan servicer and the U.S. Department of Education’s office of Federal Student Aid (FSA). The updates could include your monthly payment amount and due date.
- Update your contact information on your student servicer’s website and in your StudentAid.gov profile. If you don’t know who your servicer is, visit your FSA account dashboard. Find the “My Aid” section and select “View loan servicer details.” You can also call the Federal Student Aid Information Center (FSAIC) at 1-800-4-FED-AID (1-800-433-3243).
- Consider enrolling in an Income-Based Repayment (IDR) plan. An IDR plan can make payments more affordable, depending on your income and family size. One new option is the Saving on a Valuable Education (SAVE) plan, an IDR plan replacing the current Revised Pay As You Earn (REPAYE) plan. With the SAVE plan, you could lower your monthly payments and avoid accruing unpaid interest as long as you keep up with your required payments.
- Contact your loan servicer to get information about your next payment and to restart auto-debit, sign up for auto-debit for the first time, or find out the easiest way to make a payment. Direct Loan borrowers who use auto-debit get a 0.25% interest rate deduction on their loans.
- If you are eligible for Public Service Loan Forgiveness (see below), continue certifying your employment and verify that your payment counts are accurate.
- Beware of scammers reaching out to offer assistance with payments, loan forgiveness or any other student loan program.
- Know your rights and file a complaint with us if you think they have been violated.
Public Service Loan Forgiveness (PSLF) is a program that forgives the remaining balance of your federal Direct Loans after meeting certain requirements.
To qualify for PSLF, you must:
- be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service);
- work full-time for that agency or organization;
- have Direct Loans (or consolidate other federal student loans into a Direct Loan);
- repay your loans under an income-driven repayment plan*; and
- make 120 qualifying payments.
Get more information at https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service
Understanding Your Loan and Options
- Types of Federal Loans
- Federal Loan Repayment
- Federal Loan Repayment Checklist
- Federal Loan Consolidation
- Federal Loan Forgiveness and Cancellation
- Who Is My Student Loan Servicer?
- Consumer Financial Protection Bureau (CFPB)
When Things Go Wrong
- Email the DFPI Student Loan Ombudsperson; File a Complaint with the DFPI; or call DFPI toll-free at (866) 275-2677.
- File a Complaint with FSA Ombudsman
- File a complaint with the California Department of Justice
- File a complaint with the Consumer Financial Protection Bureau
- File a complaint with the Federal Trade Commission
- Directory of Student Loan Ombuds Nationwide
Frequently Asked Questions
Below are answers to some of the most common student borrower questions. If you need assistance or have questions regarding issues with your student loan servicer, please email our Student Loan Ombudsperson at Celina.Damian@dfpi.ca.gov, or call her at (619) 610-5679.
What is the difference between federal student loans and private student loans?
Whether you obtain a federal student loan, private student loan, or both, you’re obligated to repay the money borrowed, plus interest, regardless of if you graduate or not.
Since 2010, federal student loans are made and funded directly by the U.S. Department of Education through the William D. Ford Federal Direct Loan Program. Private loans are funded by banks, credit unions, and other types of lenders. Since private lenders consider various personal factors (including credit score, job history, and school) before approving a loan, you must apply to each individual lender. Additionally, private student loans may not offer the same benefits, flexibility, and repayment terms as federal student loans.
What type of federal student loans do I have?
Borrowers can have several different types of federal loans, including Direct Loans, Federal Family Education Loans (FFELs), and Perkins Loans. Some federal loans are owned by the U.S. Department of Education while others are owned by private companies. Borrowers may have a mix of federally and privately owned federal loans. To find out what type of loan you have, log on to your FSA account https://studentaid.gov/fsa-id/create-account/launch and you will find your “Loan Types” in your account dashboard.
Please note that private loans will not appear on your studentaid.gov account.
What is the Student Borrower Bill of Rights?
California is one of only 12 states that has a Student Borrower Bill of Rights. The Bill of Rights says that student loan servicers have to
- provide clear and accurate information;
- minimize fees;
- keep records;
- and not engage in deceptive or abusive practices.
You can file a complaint against your servicer if they are not providing accurate and timely information about your repayment options, Public Service Loan Forgiveness count or to report a scammer.
What is difference between a lender and a servicer?
The lender is the company or organization lending you the money. They “originate” the loan.
The servicer is the company that tracks loans while you are in school, collects and processes your loan payments, responds to borrower inquiries and processes changes in repayment plans, deferments, forbearances, or other activities. In most cases, the servicer is the borrower’s main point of contact.
For more information about your federal student loan servicer, visit https://studentaid.gov/manage-loans/repayment/servicers
My student loan payments are too high, what are my options?
Consider an Income-Driven Repayment (IDR) plan which can reduce your monthly payment to as low as $0. You can use the Department of Education’s https://studentaid.gov/loan-simulator to estimate payments and choose the right plan for you. Please remember that payment pauses known as deferment and forbearance, accrue interest and capitalization and will increase your principal balance and monthly payments in the long run.
You can contact your loan servicer to discuss your options.
What is Income-Driven Repayment (IDR) Plan?
An income-driven repayment (IDR) plan is an affordable monthly student loan payment based on your income and family size. There are four income-driven repayment plans:
- Saving on a Valuable Education (SAVE) Plan—formerly the REPAYE Plan
- Pay As You Earn Repayment Plan (PAYE Plan)
- Income-Based Repayment Plan (IBR Plan)
- Income-Contingent Repayment Plan (ICR Plan)
Your payment amount under an IDR plan is a percentage of your discretionary income. The percentage is different depending on the plan. A borrower is required to “recertify” income and family size annually. Find out if an IDR plan is the best option for you.
What is the Savings on A Valuable Education (SAVE) repayment plan?
The SAVE repayment plan is an Income-Driven Repayment (IDR) plan that was created in July 2023 and will replace the existing Revised Pay-As-You-Earn (REPAYE) plan. It is the most generous existing IDR plan for most borrowers because the amount of income protected from payments on the new SAVE plan will rise from 150 percent to 225 percent of the Federal poverty guidelines (FPL). There are other benefits of the SAVE plan which will be fully implemented in July 2024.
Borrowers on the REPAYE plan will be automatically enrolled in the SAVE plan and will see their payments automatically adjusted with no action on their part. All other borrowers will have to apply for the SAVE Plan.
What is Public Service Loan Forgiveness (PSLF)?
The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
For the PSLF Application, click here.
Important*: You must be working for a qualifying employer at the time you submit the form for forgiveness and at the time the remaining balance on your loan is forgiven.
What loans are eligible for Public Service Loan Forgiveness (PSLF)?
Any loan received under the William D. Ford Federal Direct Loan (Direct Loan) Program qualifies for PSLF.
Loans from these federal student loan programs don’t qualify for PSLF: the Federal Family Education Loan (FFEL) Program and the Federal Perkins Loan (Perkins Loan) Program. However, they may become eligible if you consolidate them into a Direct Consolidation Loan.
Student loans from private lenders do not qualify for PSLF.
I do not work for a public service employer, are there other forgiveness options?
Yes, if you are a borrower enrolled in an Income-Driven Repayment (IDR) Plan you are entitled to forgiveness after 20 or 25 years depending on your loan type. You do not need to apply for IDR forgiveness; however, you must ensure you are enrolled in an IDR plan.
Last year, ED announced the One-Time IDR Adjustment, through which they will review borrower accounts and give borrowers credit towards IDR Forgiveness, regardless of payment plan. Additionally, they will give credit towards IDR forgiveness for certain periods of forbearance and deferment. These adjustments will take place through 2024 and most borrowers do not have to take action. If you are a borrower with commercially held FFEL loans, you must consolidate into a Direct Loan before the end of 2023 to have your loan reviewed.
What is a Qualifying Employer?
Qualifying employment for the PSLF Program isn’t about the specific job that you do for your employer. Instead, it’s about who your employer is. Employment with the following types of organizations qualifies for PSLF:
- Government organizations at any level (U.S. federal, state, local, or tribal) – this includes the U.S. military
- Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
- Serving as a full-time AmeriCorps or Peace Corps volunteer also counts as qualifying employment for the PSLF Program.
The following types of employers don’t qualify for PSLF:
- Labor unions
- Partisan political organizations
- For-profit organizations, including for-profit government contractors
Other types of not-for-profit organizations: If you work for a not-for-profit organization that is not tax-exempt under Section 501(c)(3) of the Internal Revenue Code, it can still be considered a qualifying employer if it provides certain types of qualifying public services.
Search employer eligibility for Public Service Loan Forgiveness (PSLF) on the FSA website.
What counts as full-time employment?
For PSLF, full-time employment is working for a qualifying employer(s) for a weekly average, alone or when combined, equal to at least 30 hours:
- during the period being certified;
- throughout a contractual or employment period of at least 8 months in a year, such as elementary and secondary school teachers, in which case the borrower is deemed to have worked full time for the entire year; or
- determined by multiplying each credit or contact hour taught per week by at least 3.35 in non-tenure track employment at an institution of higher education.
Routine paid vacation or paid leave time provided by an employer, and leave taken under the Family and Medical Leave Act of 1993 (29 U.S.C. 2612(a)(1)) is to be included when determining if you are working full-time.
How do I certify my employment?
Your employer will need to sign an Employment Certification Form (ECF). FSA recently updated their certification process, and you can now email the ECF to your employer for their digital signature. You should be prepared with the correct email address for the authorized official before getting started on PSLF Help Tool.
You may also submit a PSLF form by downloading the PDF after going through the PSLF Help Tool. While in tool, choose manual signature and on the next page select the View in My Activity button. From the My Activity page, download your form, print it, sign it, and have your employer(s) sign your form.
If you prefer not to use the PSLF Help Tool, you can download and print a blank PDF of the form, complete all sections, sign it, and have your employer(s) sign it.
If you choose to complete a downloaded PDF of the PSLF form, remember digital signatures from you or your employer must be hand-drawn (from a signature pad, mouse, finger, or by taking a picture of a signature drawn on a piece of paper that you then scan and embed on the signature line of the PSLF form) to be accepted.
Who can certify my employment?
Your employment can be certified by an official who has access to your employment or service records and is authorized by your employer to certify your employment. If you are a State of California employee, you can submit the form to your personnel analyst.
Do I have to submit an employer certification for different employers?
Yes. To receive the maximum credit towards PSLF you must submit one certification form for each qualifying employer.
What is a Qualifying Payment?
A qualifying monthly payment is a payment that you make:
- after Oct. 1, 2007;
- under a qualifying repayment plan (an income-driven repayment plan or the standard 10-year repayment plan);
- for the full amount due as shown on your bill;
- no later than 15 days after your due date; and
- while you are employed full-time by a qualifying employer.
You can’t make a qualifying monthly payment while your loans are in:
- an in-school status;
- the grace period;
- a deferment; or
- a forbearance* COVID-19 forbearance months count towards PSLF and TEPSLF as long as you meet all other requirements..
My loan is in default, what can I do?
There are two main ways to get out of default, by rehabilitating your loan(s) and consolidating your loan(s). Read about those options here. https://studentaid.gov/manage-loans/default/get-out.
In April, the Department of Education announced the Fresh Start Initiative to help borrowers that are in default. Under Fresh Start borrowers will have the chance to reenter repayment in good standing, eliminate the impact of default and regain several student aid benefits. Read more information here https://studentaid.gov/announcements-events/default-fresh-start.
What if I have a problem with my loan servicer?
The DFPI assists with complaints from student borrowers and enforces violations of the underlying law, the California Student Borrower Bill of Rights. If you are a California resident and are experiencing issues with your loan servicer, contact the DFPI’s Consumer Services Office via email at ASK.DFPI@dfpi.ca.gov, call toll-free at (866-275-2677), or file a complaint online.
Someone called me offering me loan forgiveness, should I sign up with their service?
If an unknown caller or email sender offers debt relief or immediate loan forgiveness, do not respond or provide any personal information, including your Federal Student Aid (FSA) login information, or bank account or credit card information. It may be a scammer.
No one can promise immediate and total student loan forgiveness or cancellation. You should never pay fees to enroll in federal forgiveness programs.
Your loan servicer and the Department of Education (ED) will not contact you over the phone multiple times a day or offer “urgent” or “special” access to a repayment or forgiveness plan. If you have questions about forgiveness options or need help making payments log on to https://studentaid.gov/h/manage-loans or contact your servicer directly.