While the federal student loan payment pause is expected to end in May 2022, millions of current borrowers (and lenders) are left with less information than they need to know what will happen when that May deadline comes to pass.
This blog has been updated on December 23rd, 2021, in light of the recent extension of the student loan pause.
While the US Department of Education has agreed to renew 43 million student loan contracts with lenders for 2 billion dollars, not all lenders are interested in taking back those accounts. This leaves at least 16 million borrowers paying a new lender next year — and they still don’t know who.
Unclear information on the student loan payment pause
While the US Department of Education still expects to restart the student loan payment pause on May 1st, this is the first time in history that it has had to bring back as many as 43 million borrowers into repayment after such a long period.
On top of the sheer number of borrowers that need to be brought back to repayment, millions of them will need to switch to other lenders’ accounts. The logistical burden of making all of this happen is putting a strain on the system.
The restart is not expected to go smoothly by some lawmakers, either. Two Republican lawmakers wrote a letter to Education Secretary Miguel Cardona expressing their deep concern. “The lack of clarity and guidance about the process surrounding returning borrowers to repayment is as troubling as the process is uncertain,” they said.
Lawmakers and government agencies alike want to see lenders held to a higher standard to streamline payments, reduce confusion, and foster healthier debt repayment for borrowers. That’s where efficient debt repayment and easy-to-use financial wellness apps come into the picture.
Spinwheel helps lenders elevate their student loan payment process
While debt repayment can be difficult for lenders and borrowers alike, especially while America faces a debt crisis, Spinwheel’s debt API makes things a bit easier. Here at Spinwheel, we believe that debt shouldn’t hold anyone back. That’s why our debt API for repayment apps democratize intelligent debt solutions.
Spinwheel can be integrated directly into school loan repayment apps to help borrowers repay their debt faster and more intelligently. What’s more, Spinwheel allows student loan borrowers to make micropayments from their lender’s apps. Payments can be sent whenever funds are available in the borrower’s account. Debt can also be intelligently optimized with our debt API algorithm that optimizes repayments to allow student loans — and other debts — to be repaid quicker.
For added convenience, Spinwheel can allow borrowers to round up small transactions to pay their debt faster. Transactions can be rounded up to the nearest dollar, and the surplus change is added directly to their student loan repayment.
Spinwheel helps student loan lenders and borrowers alike
With Spinwheel’s debt API keys, lenders can help their borrowers repay their debts faster and easier, with less stress on their finances – all helping create a better, healthier relationship with debt. Spinwheel has developed cutting-edge debt APIs that focus on ease-of-access – making your already familiar financial wellness and debt repayment apps smarter and more efficient than ever. From letting a customer use their financial data to optimize their loan payments better, helping employees manage debt efficiently, or simply offering a debt repayment calculator to help customers gain quick insights, Spinwheel is the leader in unlocking consumer value with debt APIs and thanks to their easy-to-use drop-in API modules. Your developers can customize and implement quickly.
Spinwheel has a strong focus on helping tackle student loans and student loan repayments to help students get out of debt sooner.