Listen in as VIN Foundation Executive Director Jordan Benshea has a conversation with VIN Foundation Board Member and Student Debt expert Dr. Tony Bartels on the latest news about FedLoan Servicing and how it impacts student loans.
GUEST BIO:
Dr. Tony Bartels
Tony Bartels, DVM, MBA graduated in 2012 from the Colorado State University combined MBA/DVM program and is a VIN Foundation Board Member and Student Debt Expert, and an employee of the Veterinary Information Network (VIN). He and his wife, a small-animal internal medicine specialist practicing in Denver, have more than $400,000 in veterinary-school debt that they manage using federal income-driven repayment plans. By necessity (and now obsession), his professional activities include researching and speaking on veterinary-student debt, providing guidance to colleagues on loan-repayment strategies and contributing to VIN Foundation resources. Beyond debt, his professional interests include small- and exotic-animal practice. When he’s not staring holes into his colleagues’ student-loan data, Tony enjoys fly fishing, ice hockey, camping and exploring Colorado with his wife, Audra, and their two rescued canines, Addi and Maggie.
LINKS AND INFORMATION:
- VIN Foundation Blog post
FedLoan Servicing- StudentAid.gov
- Federal Student Loan Servicers
- StudentAid PSLF
- VIN Foundation Student Debt Center
- Check your current student loan servicers and other loan details — VIN Foundation My Student Loans tool
- VIN Foundation WikiDebt
- VIN Foundation Webinars
- Stay up to date with VIN Foundation updates
- Personalized Assistance available via the special Student Debt Message Board areas:
- VIN member (including veterinary students)
- Non-VIN member (veterinarians and pre-veterinary students)
Email VIN Foundation: [email protected]
Get updates to stay tuned for the VIN Foundation webinars on student debt.
Recent Reports on FedLoan Servicing Exit:
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TRANSCRIPT
Intro
Tony Bartels, DVM, MBA: Moving loans is one of those opportunities for mistakes to happen. The types of mistakes that are typically seen when loans get moved are they put you in a different repayment plan. That can be quite a shock because we know a lot of veterinarians are using income driven repayment plans and if they put you in a different one that could raise your payments suddenly.
Jordan Benshea: That is Dr. Tony Bartels, and this is the VIN Foundation’s Veterinary Pulse podcast. I’m Jordan Benshea, Executive Director of the VIN Foundation. Join me and our cohost and VIN Foundation Board member, Dr. Matt Holland, as we talk with veterinary colleagues about critical topics and share stories. Stories that connect us as humans, as animals, as a veterinarian community. This podcast is made possible by individuals like you who donate to the VIN Foundation. Thank you. Please check the Episode Notes for Bios, links, and information mentioned.
Meet Tony Bartels, DVM, MBA: Student Debt Expert
Jordan Benshea: Hey, Tony, welcome.
Tony Bartels, DVM, MBA: Hi, Jordan. Thanks for having me again.
Jordan Benshea: You’re our most repeated guest, Tony.
Tony Bartels, DVM, MBA: Well, I figured if we could get some consistency in this student loan stuff I wouldn’t have to be, but that tends to not be the case, and so here we are.
Jordan Benshea: Alright, so listeners, as you probably know well by now, Dr. Tony Bartels is our student debt educator, VIN Foundation Board member, and works with VIN. He is by far the veterinary student debt expert.
Breaking News: FedLoan Servicing Changes
Jordan Benshea: We are going to dive right in with news that broke towards the end of last week as we’re heading into the weekend that fedloan servicing, which is the federal loan servicing arm of the Pennsylvania higher education assistance agency, also known as PHEAA, is going to stop servicing federal student loans on December 14, 2021. I feel confident that if there’s anyone that can break this down very well for us it is you, so let’s break it down. Tell us all about this.
Tony Bartels, DVM, MBA: Yes, so when this happened things rose to my mind. Things happen with student loans it seems like all the time, particularly recently. When this one came across my newsfeed it raised, it said that what I like to call the BFD level. This is a pretty big freaking deal. Fedloan servicing is one of the numbers of private entities that have been contracted by the Department of Education to service your federal student loans. They’re not the holders of your federal student loans. The Department of Education is the holder of those loans, but they contract with a lot of entities, different entities to be the primary points of contact. The major federal student loan servicers are fedloan servicing, Navient, Great Lakes, and Nelnet, Inc. There’s also about 10 other lesser-known ones, but those four comprise a lot of the federal student loan balance. I believe the numbers I saw, fedloan servicing services the loans for 8 million borrowers. There are about 40 million borrowers, so there’s a one in five chance that your loans are with fedloan servicing. So, this is a good time to, if you don’t know who’s servicing your loans, check in and see who is servicing your loans, and if it is fedloan servicing, then you want to pay extra special attention. Because when a student loan servicer stops servicing loans, that’s when the Department of Education is going to have to move your loans to a new loan servicer. Moving loans is one of those opportunities for mistakes to happen. The types of mistakes that are typically seen when loans get moved are they put you in a different repayment plan. That can be quite a shock because we know a lot of veterinarians are using income driven repayment plans and if they put you in a different one that could raise your payments suddenly.
Understanding Public Service Loan Forgiveness
Tony Bartels, DVM, MBA: They may not transfer over the amount of time that you’ve been using a particular repayment plan, or in the fedloan servicing example, which is why it’s a BFD is that they are the official monitor of public service loan forgiveness. If you’re working towards public service loan forgiveness, you’re going to be very familiar with fedloan servicing or if you have aspirations of working towards public service loan forgiveness, meaning you’re going to work for a nonprofit and hopefully have your loans forgiven after a period of time, then you’re going to probably be familiar with fedloan servicing. Now that they’re going away, all of that information is going to have to get transferred over to some new servicer or some combination of servicers that will be able to help you with that progress going forward.
Jordan Benshea: So, if somebody is in public service loan forgiveness, or they think they’re in but they’ve started working for a nonprofit, what do they need to do to make sure that they’re actually in the program in the way they need to be? What information should they be gathering to ensure that they are checking the boxes necessary?
Tony Bartels, DVM, MBA: Yeah, this is where this gets confusing, and we may have to get a little into the weeds here, but there are a number of ways you can end up with fedloan servicing as your loan servicer. One is randomly, so loan servicers are assigned randomly. About 20% of borrowers already have fedloan servicing. That doesn’t mean they’re all working towards public service loan forgiveness; it just means that they were randomly assigned federal servicing as their loan servicer. You can choose your loan servicer as part of a consolidation loan, a direct consolidation loan, which we encourage people to do after they graduate, particularly veterinarians. We encourage new graduate veterinarians to consolidate their loans and choose an income driven repayment plan, as well as choose fedloan servicing as their loan service provider. We would recommend that because it was, I want to say convenient, it would lessen the chance that your loans would move in the future, and if you were going to end up working towards public service loan forgiveness, your loans would already be where they needed to be as well as since public service loan forgiveness requires you to use an income driven repayment plan, fedloan servicing would have a lot of experience with income driven repayment, which we find to be particularly beneficial for most veterinarians. So, that was the reason why we were recommending fedloan servicing. So, you can either be randomly assigned fedloan servicing, you’ll choose them as part of your consolidation, or if you submit a public service loan forgiveness employment certification form meaning that you want to acknowledge that you have federal student loans, and you’re working for a qualifying nonprofit, state, federal, or tribal organization that will help you earn public service loan forgiveness, you’re going to submit that form. Then the Department of Education will move your loans from whatever servicer you may have had to fedloan servicing, again, because they were the official monitor of public service loan forgiveness progress. There are those three ways that you could end up having fedloan servicing as your loan servicer.
Jordan Benshea: In our student debt webinars, one of the questions that we get regularly is what if there are changes to PSLF, the Public Service Loan Forgiveness plan? People feel a lot of uncertainty about it, there’s been a lot on the news that some people that have filed haven’t gotten it. We’re just I think, correct me if I’m wrong, now seeing some people who have followed through on it that are seeing the results positively from it. But this could stoke a lot of concerns that are already in the air about the program in general. If I’m somebody that’s in PSLF, and I find out that the loan servicer who’s monitoring that program is going to no longer be monitoring as of December 14th of 2021, that might increase my concern a little bit. The thought would be, then who’s going to monitor it? How can I make sure that I have everything in place, my ducks in a row, for when that new monitor comes in?
Steps to Protect Your Loan Information
Jordan Benshea: So, whether they are in public service loan forgiveness or another repayment plan, what sort of actions can they take proactively to set themselves up for success based on this huge issue happening right now with this announcement?
Tony Bartels, DVM, MBA: Yeah, a lot to go through. I think that’s the first thing I would say is yes, those are definitely valid concerns, but I do think that it’s important to stress that none of this is changing how public service loan forgiveness works. Public service loan forgiveness is still a very beneficial program and is still very much in reach for anybody that has federal student loans, that is working for a qualifying nonprofit state, federal, or tribal organization. None of that is changing. Now, the part that we have to be a little careful of is that the organization here that has been monitoring the Public Service Loan Forgiveness process is going away, but that information shouldn’t. All of the progress that you may have logged as long as you’ve submitted those public service loan forgiveness employment certification forms should also be logged in your federal student aid data file. There is a field there that helps to track that progress, as long as you have taken that step to submit that public service loan forgiveness employment certification form. Now, if you haven’t done that, or maybe you’re very new to this and you just started your nonprofit position recently, and you’re still logging some time, or because we’re in this weird pandemic forbearance period where you haven’t had to make any payments, it didn’t seem like it made sense to submit one of those employment certification forms yet, I would encourage you to do so. Make sure that you’re submitting one of those employment certification forms, so you can get that on file. Maybe you can even get that count logged with fedloan servicing before they move on and then they’ll transfer that information to whoever the new loan servicer or servicers will be. You want to be diligent about what records you have, if you don’t have any of that, if all of this is the first time you’ve ever heard this stuff, then start logging what you do have access to. I would go into your fedloan servicing account and start downloading statements. Make sure you have all of the statements, all the correspondence that they’ve ever sent to you in some kind of record, whether that’s paper or electronic. If they have sent you some employment certification numbers in terms of logging your progress towards public service loan forgiveness, make sure you keep those and have those on file, because you may need that. Hopefully, you won’t, but chances are based on when we’ve seen loan servicers move loans from one service or to another in the past, we have seen mistakes made. You have to be in a position to know whether or not there was a mistake made on your loans and the only way you’re going to know that is if you have that documentation of your progress with that particular loan servicer.
Jordan Benshea: Another thing that’s probably really important is to make sure that your contact information is up to date.
Tony Bartels, DVM, MBA: Yes, absolutely.
Jordan Benshea: Especially for new grads, because some new grads will come out and will have school emails and then not update those. If those emails are going to different places, you want to make sure that all of that contact information is up to date.
Tony Bartels, DVM, MBA: Absolutely. Thanks for bringing that up, because that’s one of those major steps that you can take right now. Logging into fedloan servicing account and making sure they’ve got the right phone number, the right address, and the right email address, because there’s going to be correspondence that’s coming out here in the coming months and you want to make sure that you’re receiving it, so you can keep an eye on that and stay plugged in to what’s happening with your student loans.
Jordan Benshea: Yes, if you’re not receiving correspondence, that should be a red flag.
Tony Bartels, DVM, MBA: I don’t know about that, but you want to at least have the opportunity to make sure that stuff ends up in the right place.
Navigating the Pandemic Forbearance Period
Jordan Benshea: This is all coming at an unusual time for student loan borrowers in general. We have been in the midst of an unprecedented time due to the CARES Act and COVID, where all interest has been frozen through September 30th, 2021. We’re still waiting to hear about what that repayment restart looks like. Have you heard anything about that lately?
Tony Bartels, DVM, MBA: Unfortunately, not. We’re getting close enough now to the end of the pandemic forbearance period or at least when it is scheduled to end at the end of September, where we’re now starting to see people talk about what happens next. How are we going to reenter repayments or something that looks like that on October 1rst? Or is Congress or the President going to extend this even farther? There are arguments being made on both sides. I’m still in the camp where I think that this is probably going to be the end of this pandemic forbearance period. So, I do anticipate that we’re likely to reenter repayment October 1rst, and we’ll see that interest start accruing again, but we’ll see. We should get some more official notification here, I would imagine at least in the next month or so, because it’s getting pretty close to that time where if they do want to restart repayment, we’re going to have to start being notified and telling us what that means. That’s, again, why this is another one of those BFD moments for me. It’s like there’s so much going on.
Jordan Benshea: It’s a huge curveball with all the other curveballs going on!
Tony Bartels, DVM, MBA: We really need this particular curveball, with all of the other stuff that is going on with your student loans. It is going to require a deep breath, some patience, maybe a little bit of time to make sure that you’ve got all the records you need and all of these calendar events. If we do reenter repayment, we’re going to have to all watch closely to make sure there are no mistakes made when they do start moving loans away from fedloan servicing to whoever the new loan servicer or servicers are. We’re going to have to make sure there are no mistakes made there. It’s going to definitely take some time and effort to work through all of the changes that are going to happen in the coming months here.
Jordan Benshea: Yeah, almost seems as though loan borrowers almost hit the lottery with this like Time Off of payments, and now they’re getting slammed with all this legwork on the back end. Just kidding now you’ve got to double check, triple check everything and be totally on it.
Staying Informed and Proactive
Jordan Benshea: We are going to do a webinar, one of our VIN Foundation free webinars, once we do hear about the repayment restart, and check on the Episode Notes to sign up for updates. You can get our emails about when those webinars are going to happen. Where else can people go for updates, Tony?
Tony Bartels, DVM, MBA: Yeah, so we’re going to publish a blog post on this as well, on VINFoundation.org.
Jordan Benshea: That one will be in the Episode Notes, also. So, there’ll be a link to that, yeah.
Tony Bartels, DVM, MBA: Great. Studentaid.gov is another great place that you can go for updates on information. Now, I don’t believe there’s anything regarding this fedloan servicing announcement yet. I did see that the Department of Education did acknowledge that fedloan servicing was no longer going to be servicing loans after December 14th, via tweet, I believe, but I haven’t seen any kind of official press release or anything on that yet. So, they are still working through the details. I do imagine that the Department of Education will also provide some or should provide some kind of guidance on what’s going to happen logistically for those borrowers who have fedloan servicing and what to expect with their loans. We’ve gone through this in the past. There was a previous loan servicer called AES, I forget what they stood for particularly, but they discontinued servicing loans several years ago, and they did a lot of moving of loans around that time. I know my loans were part of that process and there were mistakes made. I was in an income driven repayment and all of a sudden, I wasn’t because when my loans got moved, they failed to move that particular piece of information over with it. You have to be really careful and monitor what’s happening and all of the correspondence around it to make sure that everything that’s supposed to happen and that you expect to happen is actually happening correctly.
Jordan Benshea: Right, right. Okay, we like to keep these short and sweet so that we don’t lose any audience members with these news updates, because they dive right in and get the information for our listeners. Is there anything else you think our listeners need to know about this news?
Tony Bartels, DVM, MBA: No, I do believe I’ve heard from some of our colleagues that the employment certification forms have been a little bit delayed and that was mostly due to the pandemic forbearance. I don’t believe I’ve seen a lot of very good accounting of the Public Service Loan Forgiveness time during this pandemic forbearance period. Now, again, good news is the law says that the time spent in this pandemic forbearance, as long as you were still working with a qualifying nonprofit, would count towards public service loan forgiveness. You should get that time credited toward you, but you may not have officially received any acknowledgement of that time yet from fedloan servicing. Now, again, because of all the things we’ve been talking about the pandemic forbearance ending a couple of months before fedloan servicing is exiting the scene, you’re going to want to pay extra special attention to that pandemic forbearance qualifying time when it comes to public service loan forgiveness, if you’ve been working with a qualifying organization during that entire timeframe.
Jordan Benshea: So, this is not the time to rest on your laurels.
Tony Bartels, DVM, MBA: No, not at all. Right, exactly!
Jordan Benshea: This past year plus, this is the time to be as proactive as possible and to get in there and make sure your contact information is correct, download everything that you can, if you don’t have access to everything, contact them so you can get the rest of those statements and information. Check the Episode Notes. We’ll put a link to the pods, to the blog post in there and we will have also a link to stay up to date with updates. You can get the info for our webinars as soon as we find out about the repayment restart. We’re here to answer any questions. You can always email [email protected]. That email will also be in the Episode Notes. Thanks so much, Tony. Really appreciate your time.
Tony Bartels, DVM, MBA: Yes, thanks again for having me and we’ll do our best to keep everybody informed and look forward to hearing your questions. Anything that comes up we’re happy to help.
Jordan Benshea: Absolutely. We’re here to help. Take care.
VIN Foundation Support and Resources
Jordan Benshea: Hey, all, we want to make sure you know if you have veterinary student debt questions, the VIN Foundation is here to help. We have two options for you. First, for VIN members, including veterinary students, you already have access to the Student Debt message boards on VIN. Second, if you’re not a VIN member, you can get access to the Student Debt message board area through the VIN Foundation. This special VIN Foundation access lets veterinarians and pre-veterinary students seek out help with their student loan and veterinary school questions from colleagues on VIN without a VIN membership. This is an isolated area on VIN, without access to VIN tools, content, or community. Together, we can help our colleagues work through these stressful and complex student loan topics. Check the Episode Notes for links.
Outro
Jordan Benshea: Thank you for joining us for this episode of the Veterinary Pulse. Please check the Episode Notes for additional information referenced in the podcast. If you enjoyed this podcast, please follow, subscribe, and share a review. We welcome feedback and hope you will tune in again. You can find out more about the VIN Foundation, through our website, VINFoundation.org, and our social media channels. Thank you for being here. Be well.