EdFinancial is a loan servicer for Federal Loans that has been in operation for the last 25 years. The company helps the Department of Education to manage loans, and their services are free of charge.
What does a loan servicer do?
I have talked about this in details in my previous articles such as; (we shall insert the Great Lakes and My Fed Loan links for this. You haven’t uploaded on the site yet)
But, let me remind you briefly.
Now, student loans are quite complex, and they are often accompanied by confusing terms such as servicer and lender.
Lenders are the financial institutions that offer financial aid to students. They originate, approve, and disburse the loans into student accounts. These companies are also responsible for setting loan rates and repayment periods.
One of the most common lenders for student loans is the Federal Government.
A loan servicer, on the other hand, is responsible for the management of such loans once they have been issued. In this case, the federal government appoints a company to follow up on student with issues such as;
Taking payments and remitting to the government.
Dealing with all customer related issues concerning the loans.
Making changes to the repayment plans if the student's ask for them.
Making resolutions concerning the loans.
Assistance with a postponement of payments or deferment.
Approving students for forgiveness.
Unfortunately for the students, you do not get to choose which loan servicer shall handle your case. The Department of Education under the Federal Government shall do this on your behalf.
There are many loan servicers on contract with the DOE, and each handles thousands of cases on their behalf. The statistics currently is that there are over 2 trillion dollars in student loans, and somebody needs to manage this.
So, this is where EdFinancial comes in. They are a student loan management company.
As with almost all loan servicing companies, due to the volume of work they do, there are always problems that come with the job, and as students, you need to know what to expect.
In this blog post, I shall not only tell you about what problems to expect if you are assigned this company, but I shall also enlighten you on how to overcome such problems to eliminate stressful situations.
Here we go;
Main problems encountered while using EdFinancial Company
Slow Customer Services
EdFinancial Services is one of the largest loan servicing company in the US, and hence, it serves very many clients.
It is quite reasonable for you to require your questions answered speedily and your loan related problems solved just as quick, but this is not the case. Customers have complained that whenever they call their customer services department, the call takes forever to be connected, and issues reported are never resolved on time.
This then causes a delay in processing most of the requests such as change of a repayment plan or if you want clarity on a charge in your statement.
In the end, most loans being managed by EdFinancial have problems which cannot be resolved easily.
What can you do about this?
As much as this happens with most service provider companies, it shouldn’t be the case, especially where the company is dealing with your money. It can be quite irritating when you are trying to resolve an issue such as wrong loan repayment, and it takes a couple of months to be resolved.
Now, if you need something sorted out with EdFinancial, the first thing you should check is whether the problem can be solved online. Create an account with them and check out their problems corner to see whether your problem is listed there.
The next thing you should do is ensure to call at the right times; Avoid the busy hours such as mornings, after work, and lunch times. Call them during the off-peak times when there is congestion in the network.
If this doesn’t work, you can physically visit the company offices if they are near you, and do not be in a hurry, so you can sit and wait for them to sort out the issue as you wait. Remember a loan related problem could end up costing you more than you could ever imagine.
Sometimes borrowers can start with one servicing company that they have been allocated by the federal government, and then sometimes down the line; they are switched on to another loan servicing company.
This is very common, and it happens all the time. So, the company that was handling your loan are then required to transfer your loan particulars to this other new company for continued management.
The issue that most customers have continuously complained about when it comes to EdFinancial loans is that the transfer never happens, and as such when your loan is not under management with any company, the payments are not getting updated or being received, which means you may end up in arrears and a delinquent account.
The loan servicing companies are also responsible of updating your credit report, and so, you can imagine the rollercoaster of events that shall happen as a result of not having a management company to update your loan status. You may end up with a wrong update on your report, which will affect your credit score.
I have talked about credit score in details in this article. kindly have a look to understand how a negative score can affect you.
What can you do about this problem?
Here's the thing, as much as the DOE, does not give you the right to choose the loan servicer you want, it doesn’t mean that you should just sit back and relax. No, this is your financial history we are talking about, and you need to be extra vigilant to ensure that everything runs smoothly.
So, this is what you should do. The minute you learn that your loan is being transferred to a different servicing company, contact them immediately, to find out if they have received your information and opened an account for you.
Do not lose the contacts of your previous firm even though they did not serve you well, as you may need to keep verifying details with them.
Log on to the new company's website as often as possible to verify that your details have been transferred correctly and that they are updated concerning all of the important details about your loan.
If all else fails, visit both company offices to verify the correct transfer has been made and to give you peace of mind.
Incorrect application of payments
This has to be the mother of all errors.
Imagine a situation where you would like to repay your loan in advance, or you want to increase the amount of installment you pay per month, and the company in charge ends up applying these changes to the wrong loans.
It can be quite frustrating.
This problem has been reported frequently with EdFinancial, where students claim that their loan repayment instructions have been applied to the wrong loans.
What can you do about this?
As with almost all other solutions when it comes to Loan servicing companies, the trick is to constantly monitor your account and keep in contact with them in case you notice any discrepancies in your account.
Also, ensure to ask them whether they have updated the next month's payments, to ensure there shall be no errors going forth.
Most student's advice that you should keep all of your interactions with the company online as this keeps a record of even whom you spoke to. As such, you shall always have a reference point in case matters escalate.
As a loan servicing company, they are supposed to call you constantly, whenever there is an issue, but many borrowers have complained as to the nature in which EdFinancial make contact.
Reports state that EdFinancial normally contact their customers incessantly, which is frustrating and not to mention irritating.
There has been a documented case of an ex-spouse who was constantly bombarded with calls by EdFinancial services, regarding a loan for their ex, of which they had nothing to do about. They called this poor individual so much that they requested to be taken off their calling lists in vain.
What can you do about this?
First of all, find out why they are calling you. If they are looking for a way to help you, then that is okay, but if they have mixed up their records and mistakenly calling you over something you have already sorted, then there is something you can do about it.
Remember that you are not helpless, and you have rights regardless of what the staff at EdFinancial think. If they happen to call you incessantly, contact the Department of Education and report the issue.
As a loan servicer, they are supposed to offer you help whenever you need it and give you access to your account so that you can keep it updated.
If they are not doing this, you should consider looking for an external lender, other than the Federal Government who can take over the loan and take you off their hands.
The only problem with external lenders is that their interest rates are higher compared to what you get from the Department of Education, but their services are much better, plus they offer some incentives to their customers such as loan refinancing.
Now, one thing I shall caution you about when it comes to taking loans of whichever kind is to ensure that you borrow only what you need. Do not take out extra money that is not necessary, because in the long run you shall still be required to pay up the loan, and there is nothing as painful as paying for a loan that you spent wrongly.
I hope the information above is beneficial to you as you consider the type of loans you shall take. Thank you for reading.