The two companies on Monday (Oct. 26) announced the launch of their student loan management, a free tool that offers personalized repayment plan recommendations to reduce monthly payments.
“The expiration of the CARES Act has created stress and anxiety for many of the nearly 37 million federal loan borrowers,” Earnest CEO David Green said in a news release.
“Borrowers are grappling with payment concerns amid rising inflation, and many aren’t sure who their servicer is or how to pay them. Earnest’s Student Loan Manager aims to educate borrowers on their options and help them get on the right financial track fast, whether by finding their servicer in seconds or supporting their enrollment in federal repayment programs to lower monthly payments.”
According to the release, the manager lets borrowers quickly find out who is servicing their federal student loans by entering their phone number, date of birth and ZIP code.
They can also link federal loan accounts to receive automated guidance on federal assistance program eligibility, get individualized repayment plan recommendations and sign up for federal assistance programs such as income-driven repayment.
“For millions of people, the student loan payment resumption will impact their lives in an untold number of ways,” said Bobby Matson, CEO of Payitoff. “The good news is that a plethora of options are available to borrowers to minimize their monthly payments.
The partnership comes days after reports that borrowers – many of them already facing paycheck-to-paycheck pressures, were also facing difficulties with the mechanics of paying the bills.
Many said they had gotten incorrect bills and or spent hours trying to get their servicers on the phone. One borrower told CNBC the estimated wait time when calling her loan provider was more than nine hours.
“It’s a challenging environment,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a federal student loan servicers trade group. “Sometimes there are incredibly divergent call hold times from what we’d like to see.”
Earlier this year, Earnest teamed with Nova Credit to offer private student loans for international students, who they say account for nearly 5% of the students at U.S. colleges and universities.
“Beyond being accepted to these institutions, financing their study overseas is the most challenging step for students pursuing education abroad,” the companies said in a news release in July.
“While 50 percent of students fund their education through personal savings, family funds, or alternative methods, such as work-study programs, there is increasing demand for private loans to offset education costs.”