Current student loan news for the week of July 26, 2021
Granite State Management and Resources, a federal student loan manager managed by the New Hampshire Higher Education Association Foundation, recently announced its intention not to extend its contract with the US Department of Education at the end of the year. In addition, Connecticut state colleges and universities are writing off $ 17 million in student loan debt, a move that will impact more than 18,000 current and former students. Here’s what you need to know about this week’s student loan news.
2 current trends in student loans for the week of July 26, 2021
1. Granite State Management and Resources terminates contract with Federal Student Aid
Granite State Management and Resources (GSM & R) announced in a Press release that he will terminate his contract with the US Department of Education, effective December 31 of this year. Currently, GSM & R acts as a student loan manager for 1.3 million federal student loan borrowers, handling payments, forbearance applications and repayment plans. GSM&R will no longer serve federal student emergency loans at the end of the contract and will instead focus on its private student loan product, EDvestinU.
The Ministry of Education will be responsible for reallocating the 1.3 million borrowers currently managed by GSM & R to another federal provider. Federal Student Aid COO Richard Cordray said people who currently borrow with GSM&R can anticipate “early and frequent communications and clear guidance” on the transition ahead.
How it affects student loans
GSM & R is the second federal provider to cancel its contract with the Ministry of Education this month. The Pennsylvania Higher Education Assistance Agency (PHEAA), also known as FedLoan Servicing, has announced plans to terminate his contract December 14, 2021.
Between the two agents, around 10 million borrowers will be reassigned to different federal agents through the Department of Education, adding further pressure as the administrative forbearance period ends in late September. The ministry also announced earlier this year that it take important steps towards overhauling the student loan repayment process by creating a centralized student loan platform.
Borrowers whose loans are currently managed by GSM & R and PHEAA can expect a communication from their service agent or the Ministry of Education. Borrowers affected by the move will see changes with their service agent, but their loan details will not change.
2. Connecticut State Colleges and Universities cancels the debt of over 18,000 students
Connecticut State Colleges and Universities (CSCU) to write off institutional student loan debt accumulated between summer 2019 and spring 2021 semesters, resulting in a $ 17 million forgiveness between 18,161 current and former students .
The money used to cancel the debt comes from the Federal Higher Education Emergency Relief Fund, which was designed to help colleges and students affected by the pandemic. “By eliminating the debt these students owe to institutions, we are removing a barrier that prevents too many people from continuing their education,” said CSCU President Terrence Cheng.
In addition to clearing this unpaid debt, CSCU will also waive course enrollment and account holdbacks, granting enrollment status to students who were unable to enroll in classes due to unpaid balances. .
How it affects student loans
The CSCU is following Fayetteville State University and Delaware State University, among other colleges, in using federal pandemic relief funds to write off student debt.
This debt relief is owed to the university; debt to private student lenders or the federal government is still unpaid. However, wiping off institutional debt allows current students with past due loans to enroll in courses, and it allows former students to focus on paying off other forms of student loans.
Here’s how to prepare
Whether you are new to the student loan business or are already in the process of paying off, it is wise to stay on top of how your student loan rate could change. As 2021 continues, more opportunities for cheaper loans or loan cancellations may open up; keep an eye on Bankrate Student Loan News Center for the latest trends.