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Federal student loan payments: Nelnet email sent in error

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Federal student loan borrowers were panicked after receiving an email Thursday saying loan repayments are resuming and will soon be deducted from their bank accounts.

It turns out that the message was “sent by mistake”.

Nelnet is the leading student loan servicer that mistakenly emailed borrowers. The message added to widespread confusion over whether the student loan forbearance period, which began at the start of the COVID-19 pandemic and lasted more than two years, will indeed end on August 31 as currently planned. . The erroneous alert told an unknown number of federal borrowers that Nelnet would automatically debit their bank accounts on September 1.

“All communications from service agents to federal student loan borrowers regarding the restart of student loan payments were sent in error,” the Department of Education said in a statement to Money. The agency said so ordered the services to notify federal student loan borrowers who received the message that payments remain suspended.

Shortly after the first email, Nelnet sent another message, apologizing for the error.

“You have no payment due on September 1 and no payment will be taken from your account,” the email reads. “We will send a billing statement 21 days before a payment is due.”

As of December 31, 2021, Nelnet was servicing at least 6.4 million federal student loans. (Nelnet oversees more borrower accounts through Great Lakes, another service company it owns, but the two operate separately.) It’s unclear how many of those borrowers got the message from Nelnet. The company did not respond to Money’s request for comment.

The Department of Education says less than 0.1% of all federal student loan borrowers got the message. Still, it would suggest that at least tens of thousands of borrowers received incorrect information about their federal student loans – despite the Department of Education saying no payments were collected.

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When will federal student loan repayments start again?

Nelnet’s erroneous alerts only add to the confusion and frustration student borrowers are currently feeling.

The pause in federal student loan repayments is officially supposed to end on August 31. Time is running out and neither the Department of Education nor the White House has made an official announcement on another expansion.

“The Department of Education will continue to assess the impacts of the COVID-19 pandemic and the economy on student borrowers,” the department said in its statement to Money. “We will communicate directly with borrowers on the end of the payment pause when a decision is made.”

Experts point to the lack of communication from officials thus far as a strong indicator that the Biden administration will again extend student loan forbearance, for the seventh time overall. The announcement could possibly be made in tandem with a student loan forgiveness plan.

“The lack of communication with the borrower to date makes an extension of the payment pause very likely,” Robert Farrington, founder and CEO of The College Investor, told Money recently.

For now, the only answer – however unsatisfactory – is to wait for news from those responsible. It should arrive any day now. President Biden has said he will make a decision on both forbearance and pardon”end of August.”

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