Earnest and Payitoff Collaborate to Ease Student Loan Burden
In a bid to alleviate the financial strain on student loan borrowers, Earnest, a Student finance FinTech company, has joined forces with Payitoff, a debt guidance firm, to introduce a groundbreaking solution. On October 26, 2023, these two companies unveiled their Student Loan Management tool, which is aimed at providing personalized recommendations for reducing monthly student loan payments, according to PYMNTS.
As the CARES Act’s relief measures came to an end, approximately 37 million federal loan borrowers found themselves grappling with mounting stress and uncertainty. David Green, CEO of Earnest, highlighted this issue, stating, «The expiration of the CARES Act has created stress and anxiety for many of the nearly 37 million federal loan borrowers.» He further explained that borrowers are facing payment concerns due to rising inflation, with many unsure about their loan servicers or how to manage payments effectively. The Student Loan Manager by Earnest aims to educate borrowers about their options, enabling them to regain financial stability quickly. This includes helping borrowers identify their loan servicer, offering support for enrollment in federal repayment programs, and ultimately lowering their monthly payments.
The Student Loan Manager allows borrowers to swiftly identify their federal student loan servicer by entering their phone number, date of birth, and ZIP code. Additionally, borrowers can link their federal loan accounts to receive automated guidance regarding eligibility for federal assistance programs. They can also receive personalized repayment plan recommendations and sign up for income-driven repayment plans.
Bobby Matson, CEO of Payitoff, emphasized that the resumption of student loan payments will have a significant impact on the lives of millions of people. However, he also highlighted the positive news that various options are available to borrowers to minimize their monthly payments.
This partnership comes at a crucial time when many borrowers, already facing paycheck-to-paycheck pressures, are encountering difficulties in managing their student loan payments. Some have reported receiving incorrect bills or spending hours attempting to reach their loan servicers. In fact, one borrower mentioned a staggering estimated wait time of over nine hours when trying to contact her loan provider.
Scott Buchanan, the executive director of the Student Loan Servicing Alliance, a federal student loan servicers trade group, acknowledged the challenges borrowers are facing. He noted, «It’s a challenging environment, and sometimes there are incredibly divergent call hold times from what we’d like to see.»
Earlier this year, Earnest collaborated with Nova Credit to provide private student loans for international students, who constitute nearly 5% of the student population at U.S. colleges and universities. This move aimed to ease the financial burden on students pursuing education abroad, as financing their studies overseas is often the most daunting step. While many students fund their education through personal savings, family contributions, or alternative methods like work-study programs, the demand for private loans to offset education costs is on the rise.
Earnest and Payitoff’s joint initiative comes as a welcome relief for student loan borrowers, offering them valuable tools and guidance to navigate the challenges of repaying their loans in a rapidly changing economic landscape.