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Frequently Asked Questions

What services does LoanBYE provide?

LoanBYE provides a user-friendly, stable, and secure platform for companies to provide student loan payments as a component of their employee benefits package. LoanBYE also provides employers and employees with summary level dashboards. Employee dashboards show the impact that the student loan payments are having on the employee’s loan balances and terms. Employer dashboards show the aggregate impact of student loan payments across all employees while preserving employee privacy.

 

Who pays for LoanBYE services?

The employer pays for LoanBYE services. The service is free to employees. Employees simply need to complete the registration process and meet their employer’s eligibility requirements.

 

What are the tax implications to employee and employer in 2021?

Employers can make tax-free student loan payments (up to the IRS limit) until December 31, 2025, unless future legislation extends the deadline.

Employers can contribute up to $5,250 per year toward an employee’s student loan balance and the payment will be free from payroll taxes. 

Employees can receive up to $5,250 per year from their employer to pay down their student loan balance and the payments will be free from income tax.  

How much do LoanBYE services cost the employer?

The service cost varies by the number of employee users and by the benefit plan design. The LoanBYE sales team can provide you with detailed costs tailored to your company needs, this is available by clicking the ‘Contact Us’ link on the web-site.  

 

Is my company eligible to partner with LoanBYE?

Any U.S. company, institution, or organization with employees on payroll who have a student loan may partner with LoanBYE to provide student loan repayment benefits.

 

What are the employee eligibility requirements?

Your company will decide the criteria for employee eligibility. The only LoanBYE imposed requirement is that you must have at least one current (not in deferment) student loan to  qualify. If you have questions about your eligibility under your company’s benefits policy, please contact your internal Human Resources/Benefits department.

 

Why are LoanBYE services valuable to employers?

Employees who feel they are financially stable are more productive and effective in their positions. By reducing the stress imposed by outstanding student loans, employees feel a sense of financial wellness which translates directly to their productivity. It also provides a further incentive for new employees to join the company, as well as for existing employees to remain. The LoanBYE benefit enhances employee retention and thereby helps reduce recruiting, onboarding, and training costs.

 

How do I sign up as an employer to provide LoanBYE benefits to my employees?

Click the ‘Contact Us’ button on the LoanBYE homepage and enter your contact information. A LoanBYE representative will contact you to perform your preliminary profile set-up and generate your login credentials.

 

Does LoanBYE provide student loan consolidation services?

LoanBYE does not provide student loan consolidation services directly but can refer employees to qualified partners who provide their services.

 

How do I (an employee) know the status of my application for benefits?

Employees may log in to the LoanBYE system using your username (your company email address) and the password that you created during your application. The status of your application will be displayed in the top right corner of the user dashboard screen.

 

Can I open new student loans through LoanBYE?

No. LoanBYE is not a student loan lender. We facilitate employer-sponsored benefits which enable you to pay down existing student loans at a faster rate and at a lower ultimate cost to the employee.

 

Can I access LoanBYE on my mobile device?

The current software solution is web-based, so it will work on a desktop as well as through the browser of a smartphone. A mobile app is in development and will be offered in the future to all eligible employees.

 

Is my company or personal information secure on LoanBYE?

Yes. LoanBYE’s data management plan employs multiple approaches to ensure security of your personal or corporate data:

  • Physical Security – Data centers are secured by biometric scanning, limited staff access, and on-site security staff

  • Firewall – Dedicated Cisco ASA firewall managed by top-tier engineers

  • System Security – Dedicated firewall and VPN services to help block unauthorized access

  • Operational Security – Data backups, transaction monitoring, incident management, and continuous monitoring and improvement of security program

Is an employee’s personal loan information shared with their employer?

Employers cannot see individual employees’ loan details such as lender names, loan balances, interest rates, or loan terms. Employers only have access to view aggregated statistics across the company so that they can understand the overall impact that their student loan repayment benefit contributions are having on their employees.

 

What holistic financial wellness coaching/training can LoanBYE provide?

LoanBYE can provide coaching/training/support in the following areas:

  • Financial Wellness check-up

  • Personal Budgeting (Manage debt)

  • Understanding Investments (What’s right for you?)

  • Preparing for Retirement (How to prepare)

 

What customer support options exist for companies and employees?

Companies as well as individual employees may obtain system help in the following ways:

  • Email the LoanBYE customer support team at Support@LoanBYE.com

  • Call the LoanBYE customer support team at (412) 643-0245

Key Definitions

Accrued Interest

The interest that accumulates on the unpaid balance of a loan.

Amortization

The process of paying off student loans in regular installments over a period of time.

Annual percentage rate (APR)

The interest associated with a loan.

Biden Student Loan Forgiveness

The Biden administration is forgiving up to $10,000 in federal student loans for individuals making less than $125,000 or married couples or heads of household making less than $250,000 and up to $20,000 for Pell Grant recipients.  Income based student loan repayments can also be capped at 5% of monthly income.  The student loan payment pause will be extended through December 31, 2022.  Payments will resume in 2023.

It is estimated this will wipe out roughly 1/3 of outstanding student loan debt.  However, without further action total student loan debt is projected to reach its present level in five years and continue rising.

CARES Act

Section 2206 of the CARES Act allows a portion of student loan payments to be excluded from income. Whether those payments are made directly to the employee or the lender, they will be tax-free. The income exclusion is up to $5,250 per year per employee. This new provision benefits both the employee and employer. The employee gets to avoid paying income tax on the student loan payments, while the employer gets a payroll tax exclusion.  This benefit lasts until December 31, 2025.

Default

For most federal student loans, you can be declared in default if you have not made a payment in more than 270 days. 

Private student loans often go into default as soon as you miss four monthly payments (120 days). You can also be declared in default on a private student loan if you declare bankruptcy.  

Deferment

A deferment is a temporary pause to your student loan payments for specific situations.  You might seek a deferment for active-duty military service and reenrollment in school. The U.S. Department of Education (ED) published a list of the reasons qualifying you for a deferment. If you have a subsidized loan, you don’t have to pay interest on the loan during deferment. If you have an unsubsidized loan, you are still responsible for the interest during deferment. If you don’t pay the interest as it accumulates, it will be added to your loan balance, and the amount you must pay in the future will be higher. Private student loans may or may not have a deferment option. Deferment practices vary among private lenders.

Direct PLUS loan

Direct PLUS loans are federal loans that graduate or professional degree students and parents of dependent undergraduate students can use to help pay for education expenses.

Extended repayment

The Extended Repayment Plan allows you to make lower monthly payments over a longer period than the standard ten-year repayment period.

Under this plan, your monthly payments are

  • a fixed or graduated amount,

  • made for up to 25 years, and

  • generally lower than payments made under the Standard and Graduated Repayment Plans.

However, you will end up paying more over time than under the 10-year Standard Repayment Plan.

FAFSA®

All loans made by the U.S. Department of Education require you to complete the Free Application for Federal Student Aid (FAFSA®). Schools that receive information from your FAFSA® will be able to tell you if you qualify for federal student loans. Almost every American family qualifies for federal student loans.

Federal Direct loan

A federal student loan made directly by the U.S. Department of Education. 

Federal student loans

Federal student loans are loans made or guaranteed by the Department of Education. Types of federal student loans include:

  • Direct Subsidized and Unsubsidized student loans: These loans, also known as Stafford loans, are a type of federal student loan that are either subsidized—the government pays the interest while you're in school—or unsubsidized—you pay all the interest from the time you get the loan.

  • PLUS loans: There are two types of PLUS loans: the Parent PLUS loan, available to parents of undergraduate students, and the Grad PLUS loan, which is available to students pursuing graduate degrees. All PLUS loans have a fixed interest rate and are not subsidized.

  • Perkins loans: A Perkins loan is a type of federal student loan based on financial need. Perkins loans are available to undergraduate students. A Perkins loan is a subsidized loan. 
     

Forbearance

Forbearance is a temporary postponement or reduction of your student loan payments for a period of time.  You can ask for forbearance if you are experiencing financial difficulty. 

Graduated repayment

Graduated repayment is a way to repay your student loans that works for those who expect their incomes to rise over time. In graduated repayment, payments start off low and increase every two years. You can contact your loan servicer to get information or to enroll. All federal student loan borrowers are eligible for this program.

Income-based repayment

Income-Based Repayment (IBR) is a federal student loan repayment program that adjusts the amount you owe each month based on your income and family size. 

Income-driven repayment plans

Income-Driven Repayment Plans include

  • Revised Pay As You Earn (REPAYE) 

  • Pay As You Earn (PAYE) 

  • Income-Based Repayment (IBR) 

  • Income-Contingent Repayment (ICR)

Income-driven repayment plans cap your monthly payments at a certain percentage of your discretionary income. Your payments may change as your income or family size changes. You must submit info on your income and family size each year to stay enrolled. 

If you repay your loan under an income-driven repayment plan, you may be eligible for loan forgiveness after 20 or 25 years of qualifying payments. If you work in public service, you may be eligible for loan forgiveness in as few as 10 years.

Income share agreements

Income share agreements are credit products where providers advance money to consumers to finance their education. In exchange for the advanced money, students generally promise to make payments based on a percentage of their income until either they have repaid a defined amount, or a specified period has elapsed.

Loan consolidation

When you consolidate your student loans, you are taking out a new loan. Consolidation allows you to combine several student loans into one larger loan.

Origination Fee

An upfront fee charged by a lender for processing a new loan.

Pay As You Earn (PAYE)

Pay As You Earn, or PAYE, is a federal student loan repayment plan that caps your monthly federal student loan payment at 10 percent of your discretionary income.  If enacted, President Biden’s student loan plan will reduce the monthly payment to 5% of discretionary income.

 

Private student loans

Private student loans are any student loans that are not federal student loans.

 

Public Service Loan Forgiveness

Public Service Loan Forgiveness is a program designed to help people manage federal student loan debt while pursuing a career in public service. Public Service Loan Forgiveness (PSLF) is available to many employees working in public service including all levels of government, states and municipalities, school districts, public hospitals, non-profit organizations, and more.

 

Servicemembers Civil Relief Act (SCRA)

The Servicemembers Civil Relief Act (SCRA is a federal law that provides protections for military members as they enter active duty.

If you are currently serving on active duty, you are eligible to have your interest rate lowered to 6% on loans, including all student loans, taken out prior to your active-duty military service. This benefit applies to both your federal and private student loans and is available for all active duty servicemembers, regardless of where you serve.

 

Stafford loan

Stafford loans are a type of federal student loan that are either subsidized – the government pays the interest while you're in school – or unsubsidized – you pay all the interest. 

 

Standard repayment

Unless you arrange for a different repayment schedule with your loan servicer, the standard repayment schedule is 120 months (10 years). Payments are a fixed amount over the life of the loan.

 

Student loan servicer

Your loan servicer is the company that sends you your bill each month. Servicers are companies that collect payments on a loan, respond to customer service inquiries, and handle other administrative tasks associated with maintaining a loan.

 

Subsidized loan

Subsidized loans are typically federal student loans. For all subsidized federal student loans, the U.S. Department of Education subsidizes (pays the interest on) your loan while you are in school and during periods of deferment, such as during military service. Subsidized loans are available for eligible students who demonstrate financial need. You will be notified by your school if you qualify for a subsidized loan, after you complete the Free Application for Federal Student Aid (FAFSA).

Total loan balance

It is important to keep track of how much you are borrowing to pay for college. 

To find out the balance of your federal student loans, you should visit the National Student Loan Data System (NSLDS) at https://nsldsfap.ed.gov/ . NSLDS is the U.S. Department of Education's central database for student aid and provides a centralized, integrated view of your federal student loans and grants so you can access and inquire about them.

To find out the total balance of all your private student loans, you’ll need to contact each of your private student loan servicers to determine your total loan balance or check your credit report.

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