Updated June 9, 2018

Edfinancial: What You Need to Know


Is Edfinancial your federal loan servicer? Read on for what you need to know. Learn how to avoid common problems.

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What Is EdFinancial

Edfinancial is a federal student loan servicer, with over 25 years in business. They help the Department of Education (DOE) manage your student loans. Their services are free. Some of the things they help with include:

  • Taking payments
  • Dealing with customer service issues
  • Switching repayment plans if you can't afford payments
  • Resolving any issues with your loans
  • Assisting you in postponing payments
  • Applying for forgiveness programs

Unfortunately, student loan servicers are randomly assigned by the DOE. You have no control over who you'll get.

Each servicer deals with hundreds of thousands of borrowers. This is a recipe for issues to arise.

We have highlighted the most common problems with EdFinancial. You can avoid them if you know the right steps to take. Read on to learn what you may run into.

Making Payments With Edfinancial

You can make payments by auto debit, phone, your bank's bill pay service, mail-in check, or manually on their website. Here are some tips for paying off your loans:

  • Get a discount with auto debit. You get a 0.25% reduction on interest rates when you register for KwikPay┬«.

    Your monthly payments will automatically be deducted from your bank account. You won't have to worry about missing a payment.

  • Paying ahead. You can pay more than your monthly payment to pay off your loans faster.

    If you're on KwikPay, you can specify an additional amount (above your minimum scheduled monthly payment) in the "Additional Amount" field. The extra amount will be applied proportionally across all your loans.

    Tip: You can also make an extra payment online in "Manage My Account (MMA)" You can choose the loan you want to apply the extra payment to.

  • Targeting payments. If you have more than one loan, Edfinancial will distribute your payment proportionally across all the loans. If you want to pay more on one loan (for example, the loan with the highest interest rate), you can target a higher payment to that loan in MMA.

    If you have a consolidated loan, you can target higher payments to one of the portions (subsidized or subsidized). You need to contact Edfinancial.

When Should You Contact EdFinancial?

You should contact EdFinancial if you have any issues. They are there to help you with payments. Here are some situations when you should definitely contact them:

  • You see bill issues
  • Your contact information changes
  • You can't afford your payments
  • You need to change your payment due dates
  • You received a bill while still in school
  • You have not received a bill

Note: If you don't contact EdFinancial, your loan automatically goes into the Standard Repayment plan. This occurs whether you can afford it or not. If you can't afford the payments, contact them to set up a different repayment plan.

You can contact EdFinancial at 1-800-337-6884 or through their website.

For questions about EdFinancial or other servicers, call the Department of Education at 1-800-872-5327.

Common Problems

  • Slow Customer Service: This is the largest debt many borrowers have. When you need something done, you expect it to be taken care of quickly. But what happens when you call, and they lack a proper response or the wait time is too long? Some borrowers also reported very slow processing of paperwork when switching repayment plans. This has caused problems in managing their loans.

    What You Can Do: If you need to contact your servicer, the best option is to see if the problem can be resolved online. Create your online account for EdFinancial. If you need to call, learn the times to avoid: morning, lunch breaks, or after work. If you have paperwork, send it as early as possible and check up on the status often.

    To call EdFinancial, dial 1-800-337-6884. If you are not being helped by EdFinancial, you may need to call the Department of Education. Or you can log on to the Federal Student Aid website for help.

  • Transferred Loans: Did you start with EdFinancial and then got switched to another servicer (or vice versa)? This can happen randomly and is not your call to make. If this is the case, you may have run into issues. Some borrowers have noted that their loans were reported delinquent after a transfer. EdFinancial continued to report to the credit bureaus even after a transfer. This can cause your credit to plummet.

    What You Can Do: Make sure to keep in contact with your servicer. If you learn your loans are going to be transferred, contact the new servicer as soon as possible. But make sure to stay in contact with your previous servicer. They may report information to a bureau even though your loans have been transferred. You can contact the three credit bureaus and report the issue. You can also contact the servicer, as they can sometimes remove a negative remark, or at least make a notation.

  • Payments Applied Incorrectly: Many students wish to pay off student loans early. You can specify larger payments on certain loans. But sometimes, it's not set up correctly. Some borrowers noted that EdFinancial did not apply payments to the correct loans.

    What You Can Do: If you notice your payment was applied incorrectly, contact them. They may not be able to change a payment that has been applied. But you can at least have them check how the next month's payment will be applied. The best option is to complete all payments online. The site will keep your records handy.

    Tip: Signing up for auto-debit is the best way to save money. You will get a .25% interest rate reduction.

  • Excessive Contact: Loan servicers will call you. Yes. You miss a payment, and they will begin calling you from the first day past due. There have been reports of EdFinancial contacting borrowers incessantly. There are rules as to whom they can contact and what information they can release. Know your rights as a borrower.

    What You Can Do: Contact the Department of Education. Always update your contact information. Remember: if your loan servicer is calling, they want to help. It's because they don't want you to end up in default.

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This Student Loan Resource You Should Not Ignore
  • The average student takes over 20 years to pay off their student loan. This guide shows you 24 shortcuts.
  • Learn about the common mistakes almost everyone makes, so you can avoid them.
  • Learn how student loan forgiveness works, if consolidation or refinancing is right for you, and the difference between forbearance and deferment.

Disputes: Who Do I Call?

Having an issue with your servicer? You should contact them immediately. If you are not getting the answers you need, the next step is to call the Department of Education at 1-800-872-5327.

If you find that there is still no resolution, you should contact the Ombudsman Group. They are a confidential resource to resolve student aid disputes. You should use them as a last resort.

Repayment Help from EdFinancial

All student loan borrowers begin repayment with the Standard Repayment Plan. The Standard Repayment Plan evenly divides payments over 10 years. This is the quickest way to repay with the least amount of interest.

If you can't make the monthly payments, EdFinancial offers several repayment and postponement options.

  • Graduated Repayment Plans: This plan is still a 10-year plan, but the payments start out low and get bigger. Your payments increase by 20% every two years. Your final two years of payments will never be more than three times your original payment.

    This is a great option if you know that your income will increase over the next decade. If you do not think you will be able to afford the increase every two years, you may want to reconsider.

    Keep in mind that you can always return to the standard repayment plan. Or you may want to enter into one of the income-driven repayment plans.

  • Income-Driven Repayment Plans: These plans depend on your current financial situation. There are four income-driven repayment plans. Each has a different benefit to borrowers. The four different plans are: Pay As You Earn (PAYE), Revised PAYE, Income-Based, and Income-Contingent plans.

    It's important to get any documents to your servicer immediately. These plans take a long time to process. The best thing to do is to speak with your servicer.

  • Deferments or Forbearances: Do you need to postpone your loans? Calling EdFinancial for a deferment or forbearance is your best option.

    A deferment can be used for many options. During a deferment, the federal government covers the interest on your subsidized loans. You are still responsible for the interest on the unsubsidized loans. A deferment is useful during periods of unemployment or underemployment, economic hardship, and in-school.

    A forbearance is valid for up to 12 months, with a cumulative maximum of 3 years. During a forbearance, interest will accrue on all your loans. Forbearances are used during unemployment, underemployment, large medical expenses, and for other reasons. For more information, read our article about forbearances and deferments.

You Might Also Consider

If you are no longer satisfied with EdFinancial and want to leave, there are a couple of options.

  • Consolidation: If you have many federal loans, you may have multiple monthly payments. When you consolidate your loans, it becomes one big loan. You are given a new payment due date and only one payment per month. This can make it easier to pay.

    You also get a different interest rate (a weighted average of your loan rates). If you had high interest rates on some loans, this may help. But keep in mind that your lowest interest rate will increase.

  • Loan Refinance: If you have a mix of federal and private loans, refinance may be the best option. Refinancing is through a private lender. They will combine your loans and give you an interest rate based on your creditworthiness. This will create one monthly payment.

    Also, if you had private loans with high interest rates, this may help. Getting a lower interest rate will save you a lot of money during the terms of your loans. Read our article on refinancing to learn more.

Bottom Line

Your servicer is there to assist you. If you ever feel as though you're struggling, contact them. The best thing you can do is to keep records of your payments. Always remain in contact with your servicer.

Track your loans from the date of first disbursement. Be aware of any fees and questionable charges. Know your interest rates. Remember paying interest while in school will help you over time. Learning which repayment options to choose can help in times of need.

Keep yourself educated. Read through our other articles about student loans. We will help you gain confidence when speaking with your loan servicer.

More from CreditDonkey:


How to Lower Student Loan Payments


Should I Consolidate Student Loans


Student Loan Forgiveness

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