The U.S. Department of Education (ED) has initiated this e-mail contact to emphasize the availability of the “income-driven” repayment plan options. The intent is to ensure that all borrowers have the appropriate information to select the repayment plan that is appropriate for their individual circumstances “so that student loan debt does not stand in the way of life’s opportunities.”
The focus of this undertaking includes several categories of borrowers. The first priority is those borrowers whose grace period will end soon. Additionally, borrowers who have become delinquent in payments, along with those borrowers in deferment or forbearance due to financial hardship or unemployment are included in the aim of this thrust. And, finally, the last group encompassed in this particular drive is those who have higher-than-average student loan debts.
Borrowers are urged to access and review various resources pertinent to gaining an understanding of the diverse repayment plan options. They are also informed that their loan servicer will be contacting them soon, if they have not already, regarding the various repayment options. ED suggests the loan servicer as a good source of information to further understand the repayment plans available.
ED’s initiative began this month and will continue through mid-December. It is anticipated that approximately 3.5 million borrowers will be contacted. Although the campaign is directed toward prior borrowers, it is possible that some of these same individuals have recently returned to school, or are still in school. Thus, schools should be aware of the premise of the effort, as well as the individuals most likely to be the target of the e-mails.
As always, it is important to ensure borrowers are alert to the benefit of the income-driven repayment plans, but also the impact of extending repayment over a longer period. The additional amount a borrower will pay by extending repayment from a 10-year standard repayment plan to an income-driven repayment plan that may allow up to 25 years for repayment will be significant over the life of the loan.
Below is a sample of the text used in the e-mail to those borrowers who are in their grace period and owe more than $25,000.