Frequently Asked Questions
Here you can find answers to many common questions, learn about student loans, and get some good advice on managing your student loan debt after college. Use the categories below to find what you need, or contact us if you need assistance.
What is the PUT Program?
On May 7, 2008, the Ensuring Continued Access to Student Loans Act (ECASLA) was signed into law, thus creating the PUT Program. This legislation authorizes the U.S. Department of Education to purchase federal student loans from lenders to ensure on-going liquidity and availability of funds for student loans. The purpose of the program is to provide lenders with the means to continue offering student loans to students.
If I want my loans with one lender, can I consolidate? Doesn't Direct Lending offer consolidation?
Yes, you can consolidate your loans through Direct Lending, but the only real benefit is combined billing. Depending on your repayment terms, you will likely pay more interest over the term of your loan, so it could cost you more money in the long run. Since Edfinancial Services offers electronic funds transfer (EFT), we can automatically debit your checking or savings account for our serviced loans so you won't have to write two checks.
I was offered/saw on the website that I would have “life of the loan servicing” by Edfinancial Services for Edamerica. Is that not true?
Edfinancial Services provides student loan servicing for more than a dozen of the nation’s top 100 lenders. Due to recent legislation and an unprecedented liquidity crisis, many lenders, including Edamerica, have been forced to change their business models. In order to continue to make new loans to students and parents, lenders are relying on the Department of Education and the U.S. Treasury for funding, rather than on the student loan secondary markets that traditionally purchased and held student loans. Right now, the Department of Education has its own service provider, and it’s not Edfinancial Services.
If my loan(s) is transferred to the Department of Education, does that mean that it is now considered to be a Direct Loan?
No. The loan is still a FFEL program loan and is not considered to be a Direct Loan.
Will my deferment/forbearance automatically be applied on my loan(s) that was transferred to the Department of Education?
You will need to send a copy of the deferment/forbearance request to the Department of Education Servicing Center to request a deferment/forbearance for any loan(s) transferred to them. You may have other loans that are not included in this loan transfer, and we will process your deferment/forbearance for any loan(s) that continues to be serviced by Edfinancial Services.
What if I need to take out an additional loan next year?
Due to the recent enactment of the Health Care and Education Reconciliation Act of 2010, you will not be able to use a FFELP lender for your Federal Stafford, PLUS and/or GradPLUS Loans for the upcoming 2010-2011 academic year.
Your college or university will process your new 2010-2011 loans through the U.S. Department of Education’s Federal Direct Loan Program. Information and directions should be forthcoming from your school.
Please note that Edfinancial Services will continue to service your prior loans unless otherwise notified.
Are all my current student loans affected by the PUT Program?
You may have other loans with Edfinancial Services that are not impacted by this loan transfer and can be viewed at www.edfinancial.com. The ECASLA only authorizes lenders to sell loans disbursed for the 2007/2008, 2008/2009 and 2009/2010 academic years. If you have loans for prior academic years, these loans will remain with your lender and current servicer. Please refer to the loan transfer notification sent by Edfinancial Services to view the details of what loan(s) will be transferred to the Department of Education. It is important that you keep careful records of your student loans, who holds them and who services them.
What if I do not want to participate in the PUT Program?
Unfortunately, the decision to participate in the PUT program is determined by your lender. The lender of your student loan(s) is authorized to sell your loan to the U.S. Department of Education under ECASLA.
How will this transfer of ownership under the PUT Program change my loan?
The terms and conditions of your loan will not be impacted by the transfer of ownership. All future payments and correspondence regarding your loan(s) that has been sold should now be directed to the Department of Education Student Loan Servicing Center. If you have any questions regarding the loan(s) that has been transferred, please contact the Department of Education Student Loan Servicing Center at 1-800-508-1378, Monday through Friday 8:00 a.m. to 11:00 p.m., ET. Please be advised that you may have other loans through this lender that are not impacted by the PUT Program. If you have other loans serviced by Edfinancial Services, please continue to communicate with Edfinancial Services regarding those loans.
How will payments be applied under the PUT Program?
If you have recently sent any payments intended to be applied toward a loan(s) that is being transferred, we will work with the Department of Education Servicing Center to ensure that any applicable payments are transferred to them in a timely manner. You may have other loans that are not included in this loan transfer that will continue to be serviced by Edfinancial Services, and your payment will be applied to your account. Payments received are first applied to outstanding interest, and the remainder is applied to the principal balance, unless late fees have been assessed. Since this is a federal loan, you do not prepay interest, and there is no prepayment penalty.
Do I still have to make payments if my loan is transferred under the PUT Program?
Yes. The sale of your student loan(s) does not affect the terms and conditions governing the loan(s). Your loans will still be subject to all the terms and conditions stated in the Master Promissory Note (MPN) that you signed to take out the loan. You may have other loans that are not included in the loan transfer that will continue to be serviced by Edfinancial Services. You will receive repayment information from the Department of Education Servicing Center for any loan(s) transferred to them.