When you sign up for a Lume account, you’re not just getting a bank that offers a fee-free checking account and On-Demand Pay services, you are also getting powerful student debt repayment tools that can help you save time and money.
Lume does this by syncing your student loans to your bank account, all right within the Lume app. This means you’ll be able to view your loans through the Lume interface - making it much easier to operate than logging onto your student loan provider.
Read below to see how else Lume can help you manage your student loans:
Why the Current Loan Servicing Experience Sucks
The federal government outsources student loans to several different third-party private companies. These companies are then responsible for managing your student loan repayment, including handling your monthly payments, keeping track of your loan forgiveness and responding to your questions.
These websites are often clunky and hard to use and are not designed with nurses’ best interests. As a result, many borrowers misunderstand how much they owe, what their monthly payment plan is, and how an extra few dollars a month, when applied to the right loans, can save thousands of dollars in total debt and years off your repayment period.
Unfortunately, not every loan servicer provides transparent information to borrowers, which could cause them to pay more or miss out on money saving options. Some state governments have sued federal loan servicers because they routinely made it hard for users to save (such as not applying early and extra payments to the principal).
Navient, one of the largest servicers, has been sued by California, Illinois, Washington, Mississippi and Pennsylvnia claiming that they gave borrowers poor advice that may have led to them paying more in interest. For example, they claim that Navient encouraged borrowers to apply for forbearance instead of steering them to an income-driven repayment (IDR) plan.
Other groups claim that Navient did not provide the right details for borrowers who qualified for Public Service Loan Forgiveness (PSLF). For example, they told borrowers that their payments qualified for PSLF, but when they applied for loan forgiveness, they were told that their payments were not eligible.
The downside is that you cannot switch to a different loan servicer without consolidating your student loans. Consolidating could result in you losing credit for payments made that count toward PSLF or IDR loan forgiveness. That means that if you want to keep your student loans, you’re generally stuck with your loan servicer.
Your other option is to refinance your student loans with a different lender, but that will convert your federal loans into private student loans. This means losing out on potential benefits like income-driven repayment, loan forgiveness programs and longer forbearance periods.
How Lume Can Help You Manage Your Student Loans
Lume doesn’t just offer banking services - it also provides assistance in managing your student loans. This is a free service that Lume provides for all account holders.
When you open a Lume bank account, you can connect it to your student loan servicer. Lume will then help you pay your monthly bill on time, allowing you to avoid late fees and negative marks on your credit score. Plus, you’ll still get the .25% interest rate discount that federal loan servicers provide if you sign up for automatic payments.
The best part of managing your student loans through Lume is that you only have to log in once. If you have multiple loan servicers, you can save a lot of time by syncing those accounts with Lume.
The Lume dashboard will also show how much you currently owe on all your student loans, the interest rate for each of those loans and your monthly payments.
Lume also estimates when you’ll pay off your student loans, and provides advice on how to speed up that timeframe. If you want to make extra payments to pay off your loans faster, Lume will allocate those extra funds to the loan with the highest interest rate. Traditional loan servicers make it much more difficult to optimize your extra loan payments, which could result in you paying more interest than you have to. In fact, some loan servicers have been sued because they’re accused of misleading borrowers who wish to apply extra payments to the loan’s principal into simply paying the next month’s due amount early.
Sign up for a Lume account today to take advantage of these and other benefits.