In response to borrowers receiving inaccurate payment amounts, often being asked to pay hundreds more than they owe, several loan servicers are placing borrowers into automatic forbearance as a way to buy themselves more time to get payment calculations in order.
The reasons behind incorrect payment amounts from servicers vary. The CFPB reports that it has discovered past instances of errors, delays, bureaucracy, and illegal actions harmful to borrowers. Additionally, many borrowers have new loan servicers.
Servicers are attributing the issues to Congress and a lack of funding for servicers to properly do their jobs. A primary cause is the miscalculation of payments under the new income-driven repayment plan, known as the SAVE plan.
What is Administrative Forbearance?
Administrative forbearance is employed to prevent billing borrowers incorrect amounts. It provides the servicer with time to accurately calculate a borrower's payment.
Administrative forbearance is the period during which payments to federally held student loans have been automatically paused or suspended and interest rates set to 0%.
Additionally, administrative forbearance counts for PSLF and IDR forgiveness under new regulations finalized in July 2023.
Which Servicers are Using Administrative Forbearance?
MOHELA is using mass administrative forbearance in response to a backlog of paperwork and miscalculations.
Nelnet has been reported to be adopting this process. However, in some cases, they have encouraged borrowers to make payments under a standard plan until their paperwork is processed, drastically inc
Aidvantage seems to have no notable trend of automatic forebearance currently.
Payments with Chipper
Transparency is of the utmost importance to us and enables our users to budget, plan and explore the best repayment option for them. We're here to help ensure your payments are accurate and affordable during this time of servicer miscalculations, transitions, and the backlogs they're facing.
To confirm your payment amounts, you can review your plan details in the app, or use our IDR calculator to estimate your payments based on accurate adjustments to the SAVE plan calculations and more.
If you're asked to pay more than your plan's listed amount and you haven't been placed on automatic forbearance, please contact our support team in the chat or at support@chipper.com