You may have learned of Heartland ECSI if you have private student loans. Lenders often use payment processing services through a third party. Heartland ECSI is one of the country’s oldest third-party loan servicers.
Although it’s been around for a long time, in terms of student loan debt and how it works, you may not know what it does. We will take a closer look at this service provider in this Heartland ECSI review and what you can expect when you pay back your student loans.
Who is Heartland ECSI?
Heartland Educational Computer Systems, Inc. is a student loan service provider, or Heartland ECSI. Which means it’s not providing loans to students. Actually, it merely receives loan payments. It works across the country with over 1,900 colleges and universities. It also works to provide payment management services to private loan providers.
The service offered by Heartland ECSI is payment plans with past due accounts for lenders. Keep in mind that there are management fees related to the use of these payment plans and only some institutions are involved in this programme. Be sure to check to see if this is an option with your school.
What types of student loans does Heartland ECSI service?
Although it doesn’t actually offer student loan funds, Heartland ECSI is somewhat unique in the types of student loans it services. It handles an assortment of loans, including:
Primary care loans
Health and nursing loans
Private student loans
Refinanced student loans
The majority of loans serviced by Heartland ECSI are health and nursing loans through the Health Resources and Services Administration (HRSA), in the form of Loans for Disadvantaged Students (LDS) and Health Professions Student Loans (HPSL). What most people don’t realize is these loans are actually non-direct federal loans.
Institutional loans are private loans given out by colleges and universities directly but are serviced by Heartland ECSI.
Who has loans through Heartland ECSI?
We see a lot of HPSL loans owned by dentists, doctors, and other health care professionals at Student Loan Planner. We also saw some Heartland ECSI veterinarians with loans.
Borrowers have no choice as to the loan service provider with all these loans. Lenders appoint and remind lenders to Heartland ECSI as the loan servicer.
Heartland ECSI has an A- rating with the Better Business Bureau (BBB), but they also have their fair share of customer complaints. As of February 2019, it’s had 137 complaints in the last 3 years. This includes 42 complaints in the past 12 months. Also, 66 BBB reviews gave the servicer a 1-star rating. Most of the complaints are related to issues with billing, but there are also numerous complaints of poor customer service.
Options for people with loans serviced by Heartland ECSI
Our experience shows borrowers should move on from Heartland ECSI as soon after graduation as possible. Depending on the type of student loan, there are two main repayment options for borrowers: consolidate your federal loans and pursue loan forgiveness or refinance your loans.
Consolidating your Heartland ECSI federal loans
If Heartland ECSI provides you with federal loans, one option is to consolidate your federal loans into a direct consolidation loan. This option makes sense if, through an Income-Driven Repayment approach, you plan on loan forgiveness.
These are most likely federal loans from LDS or HPSL through the HRSA. Typically these loans do not appear on the summary tables of the National Student Loan Data System.
Typically, by looking at your interest rate, you can tell if you have these loans. All these loan types are set at exactly 5%. Institutions pick these student loans because they have lower interest rates. But schools do not know that the interest rate is not the only factor to consider when choosing student loans.
LDS and HPSL loans are known mainly to be non-direct student loans. These are therefore not eligible for any kind of redemption of loans or federal repayment schemes. To even become eligible for federal forgiveness programs, you need to consolidate these non-direct loans.
As an example, we recently had a couple coming to us seeking advice on repayment. They were both dentists and had a combined student debt of $1 million, with direct federal loans of $900,000 of their debt.
By Pay As You Earn (PAYE), they sought income-driven loan forgiveness. This family also had a Perkins loan of $50,000 and a student loan of $50,000 healthcare careers, all covered by Heartland ECSI. By consolidating these ECSI loans, they will end up paying around $1,000 a month for 10 years, just for these two loans.
When they merged, however, that essentially $100,000 would be added to the forgiven balance. Any premiums for PAYE would not go up because any program is income-based. However, because of the tax bomb that comes at the end of income-based loan forgiveness, they will end up paying about 40% of the forgiven sum.
But it’s down the road for 20 years. They have time to plan for it financially. Through restructuring, their Heartland ECSI loans of $100,000 in today’s dollars were around $20,000 to $30,000.
Refinancing your Heartland ECSI private loans
If your ECSI loan from Heartland is not set at an interest rate of 5 percent, you may have a private loan on your hands. It may be smart to refinance your loans with a new lender to get out of Heartland ECSI as your loan servicer and pay off your loans faster.
The benefit of refinancing is that you can pick the lender and service provider you are working with and take advantage of the available cashback incentives. This could result in lower interest rates and better terms, saving you thousands of interest.
If you have student loans serviced by Heartland ECSI, take time to determine which form of loans are being managed by the service provider. They’re not going out of their way to explain your loan type, so you’re going to have to do your homework to see if there are better options for repayment.
We believe that most borrowers with Heartland ECSI loans have better options on the table irrespective of what kind of loans are being serviced. The more informed you are about your student loan debt, the better your chances of finding the long-term repayment option that will save you the most money.