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Improve the Repayment Process
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Improve the Repayment Process 


Simplify Repayment and Forgiveness Programs

Borrower Advocacy is an important concept among EFC member organizations. In an effort to improve borrower experience and outcomes, EFC members counsel borrowers throughout all stages of the education financing process — from when they first begin researching loan options until they successfully make their last payment.

To improve outcomes and the borrower experience, Congress should consider simplifying the borrowing process and streamlining the repayment process, as too many options invite borrower confusion. 

Improve Income-Driven Repayment

In order to safeguard borrowers from negative amortization, EFC recommends that Congress require IDR programs to, at minimum, cover the interest accruing on a loan balance.

EFC also recommends that Department of Education (ED) and the Treasury Department (Treasury) allow student loan borrowers to give ED advance permission to automatically access their tax information for the limited purpose of determining eligibility and/or monthly payment  amounts for all IDR plans — often referred to as “multi-year consent” — rather than requiring borrowers to proactively submit updated income information every year. EFC urges ED and Treasury to quickly implement multi-year consent per their January 2016 Memorandum of Understanding.

Allow All Direct Loan Servicers to Service Consolidation Loans

Currently, borrowers who choose to consolidate their Federal Direct Student Loans are limited in their choice of servicer to the four TIVA servicers. As a result, when a borrower who is working with one of the six not-for-profit servicers consolidates their loans, the servicing must be transferred to one of the four TIVA servicers.

If a borrower is proactively engaging with their servicer and consolidating their loan, they should not be forced out of that existing, positive relationship. Allowing borrowers to choose the servicer that works best for their individual  needs would decrease the overall anxiety of the repayment process and foster positive, standing relationships between borrowers and servicers.