The Aidvantage Student Loans Debacle: What You Need to Know

Aidvantage Student Loans is a student loan servicer that was created in 2021 after Navient, one of the largest student loan servicers, split into two separate companies. Aidvantage took over the management of federal student loans that were previously serviced by Navient.

They work on behalf of the Department of Education to handle billing, provide customer service, and help borrowers manage repayment of their federal student loans.

Today, Aidvantage Student Loans services over $200 billion in federal student loans for more than 10 million borrowers. They are the second largest servicer of federal student loans after Nelnet. Aidvantage plays a critical role in the student loan industry by helping millions of borrowers effectively manage repayment of their federal loans. Their large size and focus on federal student loans makes them a major player in servicing student debt in the United States.

Applying for an Aidvantage Student Loan

To apply for an Aidvantage student loan, you must meet certain eligibility requirements. Aidvantage offers federal student loans, so you must be a U.S. citizen or eligible noncitizen enrolled at least half-time in an eligible degree or certificate program at a participating school. You must maintain satisfactory academic progress and certify that you are not in default on any federal loan.

The application process begins by completing the Free Application for Federal Student Aid (FAFSA) at each year. This determines your financial need and eligibility. Next, your school’s financial aid office will send you a financial aid offer outlining the types and amounts of aid you qualify for. This aid package may include federal student loans through Aidvantage.

If you accept a federal student loan, you will need to complete loan counseling and sign a master promissory note (MPN) at The MPN is your legal agreement to repay the loan. The counseling covers your responsibilities, repayment options, and other key information.

The required documents for an Aidvantage federal student loan include:

  • Loan counseling certificate
  • Signed MPN
  • Enrollment verification from your school

The timeline for applying depends on your school’s deadlines for the FAFSA and aid acceptance. However, it’s recommended to submit the FAFSA as early as possible each year, ideally as soon as it opens on October 1. The aid process for a school year usually begins in the fall or winter prior, with loan funds disbursing at the start of each academic term.

Interest Rates and Fees

Aidvantage offers both variable and fixed interest rates on student loans. The interest rates vary based on whether you are an undergraduate or graduate student.

Interest Rates

For undergraduates, the interest rates for fixed rate loans range from 4.99% – 12.99% depending on your credit history and other factors. The interest rates for variable rate loans range from 1.29% – 11.99%.

For graduate students, the interest rates for fixed rate loans range from 5.3% – 12.99%. The interest rates for variable rate loans range from 1.29% – 11.99%.

Generally, variable interest rates start out lower than fixed rates, but they can fluctuate over time based on market conditions. Fixed rates remain the same over the life of the loan.

Origination Fees

Aidvantage charges an origination fee on their loans. This is a percentage of the total loan amount that is deducted before you receive any loan money.

For undergraduate loans, the origination fee is typically around 1-2% of the total loan amount.

For graduate loans, the origination fee is usually around 3-5% of the total loan amount.

So for a $10,000 undergraduate loan, you may pay an origination fee of $100-$200. For a $10,000 graduate loan, the origination fee could be $300-$500.

Other Fees

Aidvantage may charge other fees in certain situations, such as:

  • Late payment fees – usually around 5% of the monthly payment if you are more than 15 days late.
  • Returned payment fees – typically $25 if a payment attempt fails.
  • Deferment or forbearance processing fee – generally $50 to process a deferment or forbearance request.

It’s important to understand all the fees associated with Aidvantage loans. Make sure to factor them into your overall costs when borrowing.

Repayment Options and Deferment

Aidvantage offers several options for repaying your student loans to fit your financial situation.

Standard Repayment Timeline

The standard repayment term for Aidvantage loans is 10 years. Your monthly payment under the standard plan aims to pay off your loan in full within 10 years of entering repayment. Payments are a fixed amount each month.

Extended and Graduated Repayment

If you need more time to repay your loans, you may qualify for extended repayment up to 25 years or graduated repayment up to 10 years. Extended repayment lowers your monthly payment by spreading it over more years, while graduated repayment starts lower and increases over time.

Deferment and Forbearance

If you are having trouble making payments, deferment and forbearance allow you to temporarily postpone payments. Deferment is based on eligibility criteria such as unemployment, economic hardship, or further studies. Forbearance is granted at the discretion of Aidvantage. Interest may accrue during these periods.

Repayment Incentives

Aidvantage offers incentives for automated payments such as reduced interest rates. They also have programs that provide loan forgiveness after a number of consecutive on-time payments. Check with Aidvantage to see if you qualify for any repayment incentives.

Consolidation and Refinancing

Consolidating and refinancing your student loans through Aidvantage can provide several benefits.

Benefits of Consolidation with Aidvantage

Consolidating your federal student loans with Aidvantage allows you to combine multiple loans into one new loan with a fixed interest rate based on the average of your loans’ rates. This can simplify repayment by allowing you to make one monthly payment instead of multiple payments. Consolidation may also allow you to extend your repayment term to lower your monthly payments. However, this increases the total interest paid over the life of the loan.

Refinancing for Lower Interest Rates

If you have a strong credit score and steady income, you may be able to refinance your student loans with Aidvantage at a lower interest rate. This can save you money on interest over the life of the loan. Aidvantage offers both variable and fixed interest rates. Carefully consider the risks of a variable rate, which could increase over time.

Process for Consolidating and Refinancing

To consolidate or refinance with Aidvantage, you’ll need to apply online and provide information about your loans, income, employment, and credit history. There are no application fees. You’ll also need to complete loan counseling. Consolidation typically takes 30-60 days, while refinancing may take 15-30 days to complete. Make sure to continue making payments on your current loans until the new consolidated or refinanced loan is disbursed. Consider the pros and cons carefully before consolidating or refinancing.

Loan Forgiveness and Discharge

If you’re struggling to repay your student loans, you may qualify for loan forgiveness or discharge programs offered by Aidvantage. These programs can potentially reduce or eliminate your remaining loan balance in certain circumstances.

Loan Forgiveness Programs

The main loan forgiveness program is Public Service Loan Forgiveness (PSLF). PSLF forgives the remaining balance on your direct loans after you have made 120 qualifying monthly payments while working full-time for a qualifying public service employer. Qualifying employers include government organizations, nonprofit organizations, and other not-for-profit organizations. Payments must be made under an income-driven repayment plan. After meeting the requirements, the remaining loan balance is forgiven tax-free.

Teacher loan forgiveness programs are also available for direct loans if you 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. You may be eligible for forgiveness of up to $17,500 on your loans.

Perkins loans have their own cancellation provisions for borrowers who go into certain occupations, like teaching, nursing, law enforcement, or the military. Check with your loan servicer for specifics.

Qualifying for Discharge

You may qualify to have your loans discharged in certain cases, including:

  • Total and permanent disability discharge if you are unable to work due to disability.

  • Closed school discharge if your school closes while you are enrolled or shortly after you withdraw.

  • False certification discharge if your school falsely certified your loan eligibility.

  • Unpaid refund discharge if your school failed to pay a required refund to your loan.

  • Bankruptcy discharge in rare cases where a bankruptcy court authorizes discharge of the loans.

  • Death discharge for federal student loans if the borrower passes away.

Discharges relieve you of having to repay all or part of your remaining loan balance. You’ll need to submit applications and documentation to qualify.

Public Service Loan Forgiveness

To receive PSLF, you must make 120 qualifying payments while working full-time for a qualifying public service employer. Payments must be made under an eligible income-driven repayment plan. Eligible loans include direct loans such as Stafford, PLUS, and consolidation loans under the direct loan program. Payments made on other loan types like Perkins or FFEL loans do not qualify.

Qualifying employers include government organizations, 501(c)(3) nonprofit organizations, and other private not-for-profit organizations providing certain types of qualifying public services. Working full-time is generally considered at least 30 hours per week.

After meeting the 120 payment requirement and other eligibility criteria, you can apply for PSLF and have your remaining loan balance forgiven tax-free. It’s important to complete and submit the PSLF form annually or when changing employers to track qualifying payments over time.

Managing and Repaying Your Loan

Once you have an Aidvantage student loan, you’ll need to manage your account and start making payments after your grace period ends. Aidvantage offers an online account system to conveniently manage your loan.

Online Account Access

Through your online Aidvantage account, you can view your loan details, make payments, update your contact information, track payment history, download tax documents, and more. You can set up your online account once your loan enters repayment by providing your Social Security number and date of birth.

Payment Plans and Options

Aidvantage offers different repayment plans to fit your budget and goals:

  • Standard Repayment Plan – Fixed monthly payments for up to 10 years
  • Graduated Repayment Plan – Payments start low and increase every 2 years
  • Extended Repayment Plan – Fixed or graduated payments up to 25 years

You can change repayment plans at any time if your financial situation changes. Payments can be made via check, debit/credit card, or bank transfer through your online account.

Making Extra Payments

You can pay more than your monthly payment amount to pay off your loan faster and reduce interest costs. Extra payments go directly to the principal balance. Aidvantage does not charge prepayment penalties.

Auto-Debit Discounts

Enrolling in auto-debit through your online account provides a 0.25% interest rate reduction while repaying your loan. Payments will automatically be withdrawn from your bank account each month. You can cancel auto-debit at any time.

Making on-time monthly payments is important to avoid delinquency and default. Carefully managing your Aidvantage account and repayment will save money on interest and help pay off your loan successfully.

Default and Delinquency

Defaulting on a student loan occurs when you fail to make payments for 270 days or more. This has serious consequences, including:

  • Your entire loan balance will become due immediately. This is called acceleration.

  • You’ll lose eligibility for deferments, forbearances, and repayment plans.

  • Your wages can be garnished without a court order. Up to 15% of your disposable pay can be taken to pay back the loan.

  • Your federal and state tax refunds can be seized to repay the loan.

  • You’ll lose eligibility for additional federal student aid.

  • Your credit score will be damaged, making it difficult to qualify for credit cards, mortgages, car loans, etc.

  • Collection fees will be added to your loan balance, increasing the amount you owe.

  • You can be sued by the federal government.

If you default, there are options to get your loan back in good standing:

  • Loan Rehabilitation – Make 9 on-time payments over 10 months and your loan will be taken out of default. Collection fees will be removed and credit damage can start to recover.

  • Loan Consolidation – Combine your defaulted loan with a new Direct Consolidation Loan. This will take the loan out of default, but collection fees won’t be removed.

  • Repayment in Full – Pay off the entire past due balance to bring your account current. However, this isn’t realistic for most borrowers struggling with default.

If you’re having trouble making payments, act before you go into default. Options include:

  • Change to an income-driven repayment plan, which bases payments on income and family size. This can lower payments.

  • Request a deferment or forbearance to temporarily postpone payments. Interest will continue to accrue.

  • Look into loan discharge/forgiveness programs if you qualify.

  • Consolidate loans or refinance for lower payments.

Getting back on track after default takes time and patience. Avoid default in the first place by staying in touch with your servicer and seeking help early.

Customer Service and Support

Aidvantage provides several options for borrowers to get help with their student loans.

Contact Information

Aidvantage has a customer service phone number that borrowers can call for assistance. The number is 1-844-756-2711. Phone support is available Monday through Friday from 8am to 9pm Eastern Time.

Borrowers can also contact Aidvantage through their website contact form at Support can also be reached by mail at the following address:

P.O. Box 2596
Winston-Salem, NC 27102

FAQs and Help Guides

The Aidvantage website has an extensive FAQ section that answers common questions about student loans and servicing. Topics covered include repayment plans, deferment, consolidation, loan forgiveness, and more.

There are also help guides that provide step-by-step instructions for tasks like applying for income-driven repayment, changing repayment plans, and managing your account online. These resources can help borrowers navigate the student loan process.

Resources for Borrowers

In addition to customer service, Aidvantage offers resources specifically aimed at helping student loan borrowers. These include:

  • Financial literacy tools to help borrowers manage their overall finances and budget for repayment
  • Default prevention assistance for borrowers struggling to make payments
  • Information on loan forgiveness programs and how to qualify
  • Options for unemployment deferment and economic hardship assistance

Having access to Aidvantage’s customer service team and web resources can provide valuable support throughout the life of a student loan. Borrowers should take advantage of these services whenever they need help or have questions.

Pros and Cons of Aidvantage

Choosing Aidvantage as your student loan servicer can provide some key benefits, but there are also a few potential drawbacks to be aware of when deciding if Aidvantage is the right fit for your student loans.

Benefits of choosing Advantage

  • Wide variety of repayment plans to choose from – Aidvantage offers income-driven, graduated, extended, and standard repayment plans to fit your budget and goals.

  • Options for loan forgiveness programs – Aidvantage services loans eligible for Public Service Loan Forgiveness and Teacher Loan Forgiveness.

  • Online account management – You can manage your account, enroll in auto-pay, make payments, and apply for benefits completely online.

  • Deferment and forbearance options – If you’re facing financial hardship, you may qualify to temporarily postpone payments.

  • Flexible customer service – Aidvantage offers phone, email, chat, and secure messaging support.

Potential drawbacks to be aware of

  • Website and app need improvement – The online interfaces have limited features and can be buggy at times.

  • Processing times can be slow – It may take longer to get a response on deferment/forbearance requests compared to some other servicers.

  • Limited branch office locations – Aidvantage does not have local offices, support is primarily through phone and online.

  • Mixed reviews on customer service – While some have great experiences, others report long hold times and inconsistent answers.

Comparison to other loan servicers

Compared to other major servicers like Nelnet and Great Lakes, Aidvantage offers competitive interest rates, fees, and repayment options. Their website capabilities lag behind some competitors, but they counter with strong deferment/forbearance and forgiveness programs. For those needing personalized service, other options like Earnest may provide better customer support. Overall, Aidvantage delivers core student loan servicing with some unique benefits.

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