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Helping borrowers with split loans
Many student borrowers have multiple federal student loans with more than one servicer. Managing "split loans" can be confusing for borrowers who may receive multiple notices on payments due and need to track multiple loan holder and servicer contacts. Although the shift to the Federal Direct Loan Program should help reduce the number of split loans in the future, schools can help minimize confusion now by reaching out to borrowers, offering both tips and contact information, such as those that follow.
Tips to help borrowers
- Communicate with borrowers early to help set the right expectations about managing loans with multiple servicers.
- Encourage borrowers to open and read loan holder correspondence.
- Focus on the importance of the National Student Loan Data System (NSLDS) as a source of information on all of a student's loans.
- Offer supplemental counseling above and beyond traditional entrance and exit counseling to prepare students for managing multiple loans with multiple servicers.
- Provide comprehensive information on the pros and cons of consolidation.
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