Types of Loans Serviced by Aidvantage

Aidvantage services and manages both federal and private student loans. The main types of federal student loans they service include:

Federal Direct Loans – These are loans issued by the federal government directly to students through their college’s financial aid office. Federal Direct Loans include Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans for graduate students, and Direct Consolidation Loans.

FFELP Loans – Also known as Federal Family Education Loan Program loans, these were federal student loans issued by private lenders but guaranteed by the government. FFELP loans include Subsidized and Unsubsidized Stafford Loans, PLUS Loans for parents and graduate students, and Consolidation Loans. After 2010, no new FFELP loans were issued but many borrowers still have these loans being serviced by Aidvantage.

Aidvantage services FFELP loans originally issued by a variety of private lenders like Sallie Mae, Nelnet, Wells Fargo, and Chase Bank. They provide servicing for over $130 billion in FFELP loans for over 7 million borrowers. This includes handling repayments, deferments, forbearances, and loan discharges.

So in summary, Aidvantage services both major types of federal student loans – Direct Loans issued directly by the Department of Education, and FFELP loans issued by private lenders but backed by the federal government. This makes them one of the largest student loan servicers managing federal loans.

Applying for Aidvantage Student Loans

Applying for student loans through Aidvantage is a straightforward process that involves submitting an application, required documents, and meeting eligibility criteria.

How to Apply

To apply for an Aidvantage student loan, you will need to complete and submit the Free Application for Federal Student Aid (FAFSA) form. This form is used to determine your eligibility for federal student aid, including loans serviced by Aidvantage. The FAFSA needs to be completed annually.

After submitting the FAFSA, you may be offered financial aid from your college or career school. This aid offer will include details on federal student loans you are eligible to receive. If you accept a federal student loan as part of your aid package, the loan will be assigned to Aidvantage for servicing.

You don’t have to complete any additional application forms directly through Aidvantage. The lender will be notified once your federal student loan is dispersed to your school so they can service the loan.

Required Documents

When applying for an Aidvantage student loan, you will need to provide certain documents as part of the application process, including:

Your Social Security number
Tax returns and income information for yourself and your parents or spouse, if applicable
List of schools you are interested in attending
Driver’s license or state ID

You may also need to submit additional documents to your school’s financial aid office for verification purposes, such as pay stubs, tax schedules, or bank statements.

Eligibility Criteria

To qualify for a federal student loan serviced by Aidvantage, you must:

Be a U.S. citizen or eligible non-citizen
Have a valid Social Security number
Be enrolled in an eligible degree or certificate program at a participating school or college
Be registered with Selective Service if you are a male between 18-25 years old
Maintain satisfactory academic progress
Not be in default on any federal education loans or owe an overpayment on federal grants
Meet federal student aid eligibility requirements

By completing the FAFSA and providing required documents, your eligibility for Aidvantage student loan programs will be determined based on federal criteria. Different types of loans have additional requirements you may need to meet as well.

Interest Rates and Fees

Aidvantage offers both variable and fixed interest rates on student loans. Variable interest rates are tied to an index rate, such as the Prime rate, and change periodically as the index rate changes. Fixed interest rates remain the same over the life of the loan.

For undergraduate Stafford loans disbursed on or after July 1, 2021, the interest rates are as follows:

Subsidized and Unsubsidized Stafford Loans have a fixed interest rate of 3.73%
PLUS Loans have a fixed interest rate of 6.28%

For graduate Stafford loans disbursed on or after July 1, 2021, the interest rates are:

Unsubsidized Stafford Loans have a fixed interest rate of 5.28%
PLUS Loans have a fixed interest rate of 6.28%

In addition to interest, Aidvantage charges fees on their loans:

Origination Fees: This is a percentage of the total loan amount charged upfront when the loan is first disbursed. Origination fees are up to 1.057% for Stafford Loans and up to 4.228% for PLUS Loans.
Late Fees: If a payment is more than 15 days late, Aidvantage will charge a late fee of up to 6% of the missed payment amount.

Understanding the interest rates and fees is important for budgeting the total cost of an Aidvantage loan. Interest rates directly impact the amount of interest that accrues. Fees like origination and late fees also add to the overall cost. Comparing interest rates and fees across different loan servicers can help borrowers get the best rates and terms.

Repayment Options

When you take out a student loan with Aidvantage, you have several options for repaying your loan. Understanding these options can help you choose the repayment plan that best fits your financial situation.

Standard Repayment Plan

The standard repayment plan breaks down your loan balance evenly across 120 monthly payments over a 10-year period. This means you will pay a fixed amount each month until your loan is paid off. The standard plan typically results in the lowest total interest paid over the life of the loan.

To qualify for the standard repayment plan, you must pay off your loan balance within the standard 10-year repayment period. This plan is best suited for borrowers who can afford higher monthly payments.

Graduated Repayment Plan

With the graduated repayment plan, your payments start out low and increase every two years over the course of your loan term. The repayment period is still 120 monthly payments over 10 years, but your payments gradually go up to account for increased earnings over time.

This plan makes sense for borrowers whose incomes are lower now but expect to steadily increase over the coming years. The downside is you may pay more interest over the life of the loan compared to the standard plan.

Income-Driven Repayment Plans

Aidvantage offers several income-driven repayment plans that base your monthly payment on your discretionary income. These plans can provide more affordable payments for borrowers with lower incomes. Options include:

Income-Based Repayment (IBR): Payment is 10% of discretionary income. Forgiveness after 20 years (undergraduate loans) or 25 years (graduate loans).
Pay As You Earn (PAYE): Payment is 10% of discretionary income. Forgiveness after 20 years.
Revised Pay As You Earn (REPAYE): Payment is 10% of discretionary income. Forgiveness after 20 years (undergraduate loans) or 25 years (graduate loans).

To qualify for these plans, you must have a partial financial hardship. Payments are recalculated each year based on your updated income and family size. These plans help limit student loan payments to an affordable percentage of your income.

Loan Consolidation/Refinancing

You may be able to consolidate or refinance multiple federal student loans through Aidvantage into one new loan with a single monthly payment. This can simplify repayment. Consolidation may also allow you to extend your repayment term or switch to an income-driven plan.

However, refinancing federal loans through a private lender turns them into private loans losing federal protections. Consider pros and cons before refinancing federal loans.

Carefully reviewing repayment options can help you choose the right plan to pay off your Aidvantage student loans. Consider your budget, career plans, and financial goals to pick the optimal approach.

Deferment and Forbearance

If you are having trouble making your student loan payments, you may be able to temporarily postpone or reduce your payments through deferment or forbearance.

Deferment

Deferment allows you to temporarily stop making payments on your federal student loans. Interest will not accrue on subsidized loans during deferment, but it will continue to accrue on unsubsidized loans.

You may qualify for deferment if you are:

Enrolled at least half-time in college or career school
In a full-time course of study in a graduate fellowship program
In an approved full-time rehabilitation program for individuals with disabilities
Unemployed or unable to find full-time employment (for a maximum of 3 years)
Experiencing economic hardship (for a maximum of 3 years)
Serving on active duty during a war, military operation, or national emergency
Performing qualifying National Guard duty during a war, military operation, or national emergency
Serving in the Peace Corps (for a maximum of 3 years)

To request a deferment, you will need to contact Aidvantage and submit documentation supporting your eligibility such as college enrollment verification, unemployment benefits statements, or military orders.

Forbearance

Forbearance allows you to temporarily stop making payments, temporarily make smaller payments, or extend the time for making payments on your federal student loans. Interest will continue to accrue during forbearance.

You may qualify for forbearance if you are:

Experiencing financial hardship
In a medical or dental internship/residency
Serving in a national service position such as AmeriCorps
In teacher loan forgiveness program
In a mandatory administrative forbearance due to certain situations such as a local or national emergency

To request forbearance, you will need to contact Aidvantage. The initial period is up to 12 months but you may be able to extend forbearance in additional 12-month intervals if you continue to experience financial hardship.

Loan Forgiveness Programs

Some Aidvantage borrowers may qualify for loan forgiveness programs that cancel all or part of their student loan debt. The most common programs are Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness, and Total and Permanent Disability Discharge.

Public Service Loan Forgiveness (PSLF)

The PSLF program forgives the remaining balance on federal Direct Loans after making 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. Qualifying employers include government organizations at any level and 501(c)(3) nonprofit organizations.

To qualify for PSLF, borrowers must:

Have eligible federal Direct Loans
Be employed full-time by a qualifying employer
Make 120 on-time qualifying monthly payments under an income-driven repayment plan
Complete the PSLF certification process annually and when changing employers

After meeting the requirements, the remaining loan balance is forgiven tax-free.

Teacher Loan Forgiveness

The Teacher Loan Forgiveness program provides loan forgiveness of up to $17,500 for Direct Subsidized and Unsubsidized Loans to eligible teachers who teach full-time for five complete and consecutive academic years in certain elementary and secondary schools and educational service agencies that serve low-income families.

The loan forgiveness can be up to $5,000 for teaching as a highly qualified teacher in eligible subject areas. An additional $17,500 is available for math, science, and special education teachers at eligible schools.

Total and Permanent Disability Discharge

Borrowers who become totally and permanently disabled and are unable to work may qualify to have their federal student loans discharged. To qualify, borrowers must provide documentation from a physician certifying that they are unable to engage in substantial gainful activity due to a medically determinable physical or mental impairment. If approved, both the borrower’s federal student loans and any co-signed private student loans are eligible for discharge.

Managing and Paying Off Aidvantage Loans

One of the most important aspects of having student loans is properly managing your payments and payoff process. Aidvantage offers several options to help borrowers effectively manage their student loans.

Online Account Access

Aidvantage allows borrowers to easily manage their student loans through a secure online account. Borrowers can log in to view loan details, make payments, update contact information, enroll in auto-debit, apply for deferments/forbearances, and more. The online platform provides 24/7 access and transparency into your student loans.

Auto-Debit

Enrolling in auto-debit through Aidvantage allows borrowers to have their monthly payments automatically withdrawn from a bank account. This ensures payments are made on time each month and can also qualify borrowers for an interest rate reduction. Setting up auto-debit payments provides peace of mind.

Making Manual Payments

For those who prefer not to enroll in auto-debit, Aidvantage offers the ability to make manual student loan payments each month. Borrowers can pay online, by phone, by mail, or by mobile app. Aidvantage offers various payment options like paying by debit/credit card, electronic check, or wire transfer.

Payoff Process

When you’re ready to pay off your Aidvantage student loans, you can contact customer service to receive a payoff quote. This will detail the exact payoff amount including any outstanding principal, interest, and fees. Aidvantage can explain the timeframe for processing your final payment. Once received, they will send a paid-in-full letter confirming your loans are satisfied. Paying off student loans is a major milestone on the path to financial freedom.

Aidvantage Customer Service

Aidvantage provides customer service to help borrowers manage their student loans. Here are some of the main ways to get assistance:

Phone Support: You can call 1-855-578-8973 to speak with a customer service representative. Phone support is available Monday – Friday from 8am – 9pm Eastern Time. Wait times can vary.
Secure Messages: You can send secure messages to Aidvantage through your online account. Responses are usually provided within 1-3 business days. This can be a convenient way to get help without calling.
Chat Support: Aidvantage offers live chat through their website. Chat hours are Monday – Friday from 8am – 8pm Eastern Time. This allows you to get real-time help online.
Email Support: You can email questions and documents to Aidvantage at StudentLoanSupport@Aidvantage.com. Responses are typically provided within 1 business day.
US Mail: You can mail letters and documentation to Aidvantage at P.O. Box 2596, Farmington, MO 63640. This is the slowest method but can be useful for submitting physical documents.
Borrower Advocates: Aidvantage has dedicated “borrower advocates” who can provide individual support and help create repayment plans. You can request to be assigned an advocate.
Aidvantage Website and Portal: The website at Aidvantage.com provides loan details, payment options, documents and helpful resources. The online portal allows you to manage your account.

Getting timely customer support is important when managing student loans. Aidvantage offers phone, email, chat, secure messaging and other channels to help borrowers. Using their online resources can also answer many common questions.

Pros and Cons of Aidvantage

Aidvantage is one of the largest student loan servicers in the United States, serving over 13 million borrowers. Here are some of the key benefits and drawbacks of Aidvantage student loans compared to other loan servicers:

Benefits

Lower interest rates: Aidvantage offers competitive variable and fixed interest rates that are often lower than private lenders. This makes repayment more affordable.
Options for income-driven repayment: Aidvantage provides access to income-driven repayment plans like IBR, PAYE, and REPAYE. These base monthly payments on income and family size.
Possible loan forgiveness: Aidvantage borrowers may qualify for Public Service Loan Forgiveness or Teacher Loan Forgiveness after meeting requirements. This provides a light at the end of the tunnel.
Deferment and forbearance: Those facing financial hardship can temporarily pause payments through deferment or forbearance to avoid delinquency or default.
No prepayment penalties: You can pay off Aidvantage loans early with no extra fees. This helps pay off principal faster and reduce interest costs.
Death and disability discharge: Outstanding Aidvantage loans can be discharged in the event of a borrower’s death or permanent disability. This provides a safety net.

Drawbacks

Origination fees: Aidvantage charges loan origination fees of 1-5% of the total loan amount. This increases the overall repayment cost.
Website and app need improvement: Aidvantage’s digital platforms have limited features and can be glitchy at times compared to private lenders. This makes account management more difficult.
Long hold times: Reaching Aidvantage customer support by phone often involves very long hold times of 30+ minutes. This causes frustration.
Payment processing delays: Aidvantage has faced some issues promptly processing payments made by borrowers in recent years. This has led to incorrect late fees.

Overall, Aidvantage offers affordable government-backed student loans but has some servicing challenges. Weighing the pros and cons helps determine if it’s the right loan servicer for your financial situation and needs.

Post Views: 41

Navigating Your Aidvantage Student Loan: Tips for the Transition