As a FedLoan student, you may have heard that your loan may soon be transferred to a new servicer. That means what to me? Fortunately, there isn’t much to be done. As a result, it’s quite reasonable if you have concerns or queries about the procedure in general.
Here is a summary of all the information you need to know.
When it comes to student FedLoan, cosigners play an important role.
Who is responsible for servicing your loan?
Firstly, a refresher course on loan servicers.
When you receive your first student FedLoan payment, the Department of Education allocates it to a servicer, who is responsible for all aspects of loan administration. Rather than being your lender, this is the corporation that gave you the money. For example, the servicer collects your payments, tracks how much you’ve paid helps with deferral or forbearance plans, and determines whether you’re eligible for any student FedLoan forgiveness programs.
As a result, they’re vital, but you generally don’t have to deal with them very often.
How has my loan servicer changed?
Your loan will no longer be serviced by PHEAA (also known as FedLoan Servicing) and will be moved to another business. Early this year, the corporation made the announcement that it would not be renewing its contract with the Department of Education, effectively ending its involvement in federal student loan lending altogether.
As a result, the Department of Education is shifting these loans to other service providers. MOHELA, Navient, EdFinancial, and Nelnet will each receive a portion of the loans. It’s possible you haven’t heard from some of these companies yet, but you will shortly.
These entities will assume responsibility for fulfilling their assigned loans by December 31, 2022. Due to the transfer taking place in January 2022, you won’t have to worry about it until the loan payments resume in January 2023.
Note that Navient is also undergoing some adjustments. Here you can find out more and stay up to date on the latest developments.
What this change means for you
Despite the fact that this is a substantial shift, you, as a borrower, should see little of an effect from it.
The new servicer will be sending you correspondence instead of FedLoans. However, your payment schedule, interest rate, or monthly payment amount will not be affected. All the changes are taking place behind the scenes.
As a final precaution, call your new service provider and make sure they have your correct contact information (address, phone, and email). Don’t let critical information slip through your fingers because you no longer monitor your old email account. Maintain a close check on all of your payments to make certain that they’ve been received and recorded correctly. In most cases, it won’t be an issue, but if something does go wrong, you’ll want to deal with it as soon as possible.
Both the Department of Education and the new servicer of your student loan should have informed you of the transfer. The National Student Loan Data System, operated by the U.S. Department of Education, can tell you who your new servicer is if you haven’t already.
Your FSA ID number or the password-reminder prompts on the site will be required to access your information. You should get in touch with your new loan servicer immediately after you find out who it is.