Seeking, borrowing and repaying student loans seem to involve reams of paperwork with piles of forms and files, almost as if you were starting a new job.
If you’re desperate to downsize this stack of paper, here’s how to do it without trashing an important document that you might miss later.
6 student loan records — and how long you should keep them
Conventional wisdom says to dispose of student loan paperwork once you pay off your debt. Another common-sense approach prescribes storing everything important as long as possible — then, if a lender or collection agency challenges you years after completing your repayment, you won’t be left without proof.
Realistically, though, the guidelines for how long to store something depend on which document you’re talking about. Here are six types of student loan files and how best to decide on when to store or shred each.
1. Student loan master promissory note (MPN)
Whether you borrowed from the Department of Education or a private lender, you agreed to a legally-binding contract outlining how and when you would repay your debt. That’s the MPN.
Consider it like the lease for your apartment or home rental. When you move into a new place, you keep your lease handy in case you’re suddenly curious whether you’re allowed to repaint the walls or rent out a room on Airbnb.
Similarly, it’s wise to keep the MPN in your possession. If you’re about to graduate, for example, you might refer back to the MPN to confirm the length of your grace period.
On the other hand, if your refinancing or consolidation lender pays off the original debt on your behalf, you can ditch the old document and keep the contract associated with your new loan.
Bottom line: Keep at least until your loan has been repaid.
2. Monthly student loan bills
You might still be receiving monthly bills in the mail for your student loan payments. These can be worthwhile if you prefer to confirm the accuracy of your monthly dues on a hard copy.
There’s no harm in keeping these slips of paper filed away. It’s possible you could need them if you decide to meet with a student loan counselor, for example.
But there’s no real need to store them at all. You could go paperless: Just be sure to review the statements, which would arrive via attachments to your email inbox, as well as keeping an eye on your online account summary to ensure your payments are being applied appropriately.
Bottom line: Keep at least until your payment for the bill in question has been applied to your account.
3. Correspondence with your lender, loan servicer or collections agency
If you’ve had problems with whomever holds your debt — perhaps to the point of losing trust in them — you might find yourself exchanging letters. Often, creating a paper trail is better than communicating over the phone with unhelpful customer service reps. The paper copies could come in handy if you later battle your loan servicer in court, for example.
However, it’s possible your correspondence with your lender is more run of the mill. Maybe you’re receiving confirmation of your annual recertification for income-driven repayment or are being informed of an administrative change (perhaps your loan has been sold to another servicer).
Whether it seems to be a serious matter or not, personal letters are worth keeping. Say you’re working toward Public Service Loan Forgiveness, for example. You’ll want to be able to locate any mailing that could prove you’ve fulfilled the eligibility requirements when the time comes to receive forgiveness.
Bottom line: Keep at least until your loan has been repaid.
4. Student loan receipt
You can typically request and receive a loan receipt from your loan servicer or lender. You could use it to correct errors on your credit report or to prove your debt-free status if you’re ever questioned.
Note that is different from a student loan payoff letter (or payoff balance statement). The letter shows how much you need to make your final payment, not that you’ve already made it. Think of it as a pre-receipt. You might need it for your student loan refinancing application, but it’s not worth keeping as long as the actual receipt.
Bottom line: Keep it indefinitely — and see below for smart storage.
5. Tax documents
If you’ve been in repayment, you know how student loans and taxes intersect. You can claim the student loan interest deduction from your federal income taxes, for example. You might also find yourself facing a big tax bill if you receive federal loan forgiveness or cancellation.
The tax forms concerning these student loans scenarios include:
- Form 1098-E: Also known as the Student Loan Interest Statement, this lender-sent form tallies your interest paid to help you claim your deduction.
- Form 1099-C: The Cancellation of Debt form confirms any loan amount forgiven or canceled, which you might need to report as income on your Form 1040.
As for how long to hold on to these and other tax documents, look to the IRS’ guidelines: The federal agency reserves the right to audit you within three years of the tax year in question. It could also pursue unreported income (perhaps in the case of loan forgiveness or cancellation) for up to six years.
Bottom line: Keep for up to seven years.
6. Paperwork relating to student loan management
You might also start collecting paperwork relating to whatever ails — or fixes — your loan repayment. Any of the following loan-management strategies are bound to get the printer in a huff:
- Deferment and forbearance
- Rehabilitation and consolidation
- Forgiveness, cancellation and discharge
- Collections and bankruptcy
Each measure could include applications and approval or denial files, as well as additional monitoring.
Say you’ve defaulted on your federal loans, for instance, and are facing collections. To avoid or reduce wage garnishment, you could file a request for a hearing alongside a financial disclosure form that would detail the dire straits of your financial situation.
In serious situations where you might need a student loan lawyer, consult with them on what court papers and other documents are worth keeping.
Bottom line: Keep at least until you’ve resolved the issue.
Keep your student loan records secure
If you’re aiming to declutter, you might be disappointed to learn that it’s wise to keep most of your student loan records for relatively long periods.
Here’s a solution: Ditch that fireproof safe or lock-and-key filing cabinet and replace it with digital storage.
You might have plenty of unused space from your favorite online provider, whether it’s Google Drive, Dropbox or something else. Ensure it’s password-protected, and monitor the file sharing permissions to confirm you’re the only person who can access them.
Backing up your most important student loan docs is also a good idea. You never know when you might need your files down the road.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|