If you’ve taken out federal student loans, there’s a good chance you’ve dealt with a federal loan servicer. These are companies that handle your loans from the time they are disbursed until their repayment. Whether you’re a new graduate, currently in school, or repaying your loans, knowing the identities of these servicers, knowing what they do and how to effectively work with them can save you time, money and stress.
Here, we take a look at what federal loan servicers do, how they differ from private lenders, what companies currently act as federal servicers and what to do if you have issues. Student loan servicers is our focus keyword, and we’ll dissect it with definition and steps that borrowers can take.
Who Are Federal Loan Servicers?
Types of Federal Loan Servicers Federal loan servicers are loan servicing businesses that have contracts with the U.S. Department of Education to help federal student loan borrowers manage their loans, including Direct Subsidized, Direct Unsubsidized, Direct PLUS, and Direct Consolidation Loans. These are not the lenders, the federal government is. Instead, servicers serve as the middleman, helping borrowers keep tabs on balances, learn about repayment plans, make payments and apply for deferments, forbearance and forgiveness programs.
They are, in essence, customer service arms of the federal student loan system.
The student loan servicers, explained So why do student loan servicers matter?
Student loan servicers do more than process your payments. They are the entity that manages all aspects of your federal student loans. Their services include:
- Mailing out statements and payment reminders
- Allocating payments properly among more than one loan
- Helping with repayment plans such as income-driven repayment (IDR)
- Process deferment and forbearance requests
- Assisting in Public Service Loan Forgiveness (PSLF)
- Issuing tax forms, such as IRS Form 1098-E for interest paid
Servicers also keep records of your account and loan history, so it’s important to keep in contact with them and update your contact information as necessary.
Federal Student Loan Servicers Today
Through 2025, the Big Five are federal student loan servicers. But in recent years, the Department of Education has shaken up its system, letting some of those servicers fall off while new ones were brought on board.
Below are some of the main student loan servicers for federal loans:
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MOHELA stands for Missouri Higher Education Loan Authority.
Now here is the sole servicer of the Public Service Loan Forgiveness (PSLF).
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Aidvantage
A servicer that had assumed Navient’s federal student loan portfolio.
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Edfinancial
Provides services borrowers for whom the lender is an FFEL lender for servicing.
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Nelnet
A long-standing federal servicer that offers proactive borrower help.
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HESC/Edfinancial
A partnership The lender for borrowers in New York and beyond.
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OSLA Servicing
Pays attention to responsive support to borrowers of federal loans.
Note: Great Lakes and Navient are no longer servicing federal loans. Borrowers who were with them have been assigned to other servicers.
How to Find Out Who Your Loan Servicer Is
You can determine who your loan servicer is by logging into your Federal Student Aid (FSA) account. Individual loans will be listed on your dashboard, along with the servicer assigned to manage them. There is also contact information so you can reach out with questions or to establish an online account.
Selecting a Repayment Plan with Your Servicer
Loan servicers help you select the most appropriate repayment plan for your financial situation. Options include:
- REPAYMENT PLAN Standard (fixed payments over 10 years)
- Extended Repayment Plan (payments are smaller in the beginning and gradually go up)
- Extended Repayment Plan (Even up to 25 years)
- Income-Driven Repayment Plans (IDR) If you have no other options for repaying IDR but do not want to sign up.
- PAYE (Pay As You Earn)
- REPAYE Plans (Revised Pay As You Earn Plans)
- IBR (Income-Based Repayment)
- ICR (Income-Contingent Repayment).
- SAVE: (Saving on A Valuable Education)—most recent and most generous.
Eligibility, paperwork and application procedures for each plan can be explained to by your servicer.
What if You’re Having Difficulty With Your Servicer?
Although federal student loan servicers are supposed to serve your best interest, borrowers complain frequently. Issues may include:
- Misapplied payments
- Inaccurate billing
- Forbearance or forgiveness processing delays
- Poor communication
If you experience problems:
- Write everything down: Document every interaction.
- Escalate: Request to speak to a supervisor or lodge a complaint with the servicer.
- File a complaint with the Federal Student Aid Ombudsman if problems are not resolved: https://studentaid.gov/feedback-ombudsman/disputes
You can also complain about it to the Consumer Financial Protection Bureau (CFPB).
Servicer Changes: What You Need to Know
If your loan is sold or transferred from one servicer to another, here is what you should do:
- Double-check with both your old and new servicer.
- Open an account on the new servicer’s site.
- Check on your loans: Balance, repayment plan and auto-debit status.
- Saveers by from previous servicer for your records.
Sometimes these transitions are seamless, and other times they are screwy. Staying proactive is key.
Loan Forgiveness and Servicers
Federal loan servicers also play a critical role by assisting you in keeping tabs on qualifying for loan forgiveness programs, which could include:
-
- That is what led me to this, and this is the biggest potential downside recipient of: Public Service Loan Forgiveness (PSLF)
- Teacher Loan Forgiveness
- IDR Loan Forgiveness (after 15-20 years of amortization)
- Temporary Expanded PSLF (TEPSLF) This is how to prepare for the next wave of the PSLF disaster J.R. Duren, CMC Contributor 1/4/2021 SHARE SHARE TWEET SHARE EMAIL Mysterious Boeing 737 twice the size of a Dreamliner produced in plain sight Temporary Expanded PSLF (TEPSLF) Getty Images If you last-minute-lopper-off-a-pantless-minion-sledding apply for temporary expanded public service loan forgiveness (TEPSLF), maybe Duncan Hunter’s 47th different House arrest commode can serve as an object lesson.
To illustrate, MOHELA now exclusively services loans related to PSLF, and they are charged with verifying your qualifying payments and employment certifications.
How to handle your loans with student loan servicers
To make the most of your servicer relationship:
- Enroll in auto-debit: Most servicers provide a 0.25% interest rate discount when you sign up to have payments automatically debited from your bank account.
- Jump on updating your contact info as soon as you move or switch phone numbers.
- Schedule reminders in your calendar for deadlines to renew for income-driven plans.
- Pull your credit report to make sure your loans are being reporting correctly.
- Ask questions — do not take the first answer as final.
As an active borrower, you control things.
Conclusion
Federal loan servicers are a critical part of the student loan system. The primary function of these companies is to act as the operational foot soldiers of the federal student loan system, handling the dirty work of day-to-day loan management on your government-sponsored repayment odyssey. While who your servicer is, keeping in regular contact, and your rights and options can have a tremendous impact on how you manage your student loans.
If at any time you’re not clear about your loans or your options, contact your servicer. And if you’re not getting the help you require, escalate the issue — help is there. When it comes to student loan servicers, knowledge really is power.
