Keyword: student loan servicer
Understanding the student loan process can be complicated, including who is responsible for your loan after it is disbursed. These are entities commonly referred to as federal loan servicers, and they are an essential part of the journey that millions of American borrowers must take when repaying their loans. This article explains what federal loan servicers are, how they work, how they compare with private loan servicers and what borrowers can do to stay on top of their loans. Our overarching keyword is “student loan servicers.
What Do Federal Loan Servicers Do?
Federal loan servicers are private entities that have been contracted by the U.S. Department of Education to manage the federal student loans. Your federal loan is assigned to one of several official servicers after your loan is disbursed. These firms work as the middle men between you and the government, and they handle day-to-day management, including billing, repayment plans and customer service.
These servicers are not lenders — they don’t own your loan. Instead, their role is to make sure your loan stays in good standing and that you know about your options for repayment.
As of 2024 you will encounter the following U.S. Department of Education federal student loan servicers: List of Federal Student Loan Servicers In Practice What do federal loan servicers do?
Here’s a list of some of the major players operating in the wider landscape of student loan servicers, most of which are currently in charge of federal student loans:
- Missouri Higher Education Loan Authority (MOHELA)
- Edfinancial Services
- Nelnet
- OSLA Servicing (Oklahoma Student Loan Authority)
- Aidvantage (a product of the Maximus company)
Note: Some past servicers such as Navient and FedLoan Servicing (PHEAA) have withdrawn from the federal servicing system. Their accounts were sent to other servicers, including Aidvantage and MOHELA.
Functions and Duties of Federal Loan Servicers
Federal loan servicers are responsible for a number of critical duties:
Loan Repayment Management
Servicers establish and handle your repayment schedule according to which plan you choose. Whether that be the Standard Repayment Plan, an Income-Driven Repayment Plan (IDR), or another option – your servicer ensures that your payments are allocated appropriately.
Customer Service
They act as your primary resource for questions about your balance, interest rates, due dates, and loan status.
Debt Consolidation and Forgiveness Programs
Your servicer also assist you if you need to consolidate loans or are interested in Public Service Loan Forgiveness (PSLF) by providing you with guidance as you work through the process and meet the eligibility requirements.
Processing of Deferments and Forbearances
In the case of financial struggles, servicers also can assist you in applying for deferral or forbearance, temporarily suspending or cutting payments on your loan.
How to Discover Your Federal Loan Servicer
If you don’t know who your federal loan servicer is, you can check by logging into the Federal Student Aid (FSA) website with your FSA ID. Your dashboard will show:
- Total loan balance
- Loan types
- Current servicer
- Repayment status
And it’s the first step in getting a handle on your student loans and contacting the right entity.
Typical Borrower Complaints with Servicer
While servicers are supposed to be helping borrowers, many have cited difficulties like:
- Customer service delays
- Confusion over qualifications for loan forgiveness programs
- Mistakes with payments
- All repayment options not clearly explained
Due to these concerns, the U.S. Department of Education and the Consumer Financial Protection Bureau (CFPB) have ratcheted up their oversight of companies servicing federal loans in recent years.
Strategies for Dealing with Your Loans via Your Servicer
To help things go as effortlessly as possible when it comes to repayment, you can follow these best practices:
Keep Records
Keep copies of your payment confirmations, emails and documents you’ve sent to your loan servicer.
Update Contact Information
Make sure that your list of phone number, email and address is up to date in your servicer’s portal.
Check Your Account Monthly
Sign in to verify payments are being applied as expected and your balance, interest, and principal are accurate.
Explore Repayment Options
If you are having trouble making payments, inquire with your servicer about IDR plans, deferments or forbearance.
Watch Out for Scams
Only Speak with your Official Servicer at studentaid. gov.Never pay a third party to help you manage your federal student loans.
Transitioning Into NextGen and the Future of Loan Servicing
The Education Department has been working on an overhaul known as the NextGen Federal Student Aid initiative, to help make borrower experiences better. This includes:
- A unified online portal
- Improved mobile accessibility
- Better customer service
- Enhanced transparency
Upon implementation, this will consolidate several services and may even decrease dependence on third-party loan servicers.
If You’re Unsatisfied With Your Loan Servicer
If you’re unhappy with the way your servicer is handling your loans, you can:
- Submit a Complaint to the Federal Student Aid Feedback System.
- Contact the Federal Student Aid Ombudsman Group if you still have a conflict.
- Reach out to the CFPB, which oversees student loan servicers and may be able to elevate your problem.
While you cannot specifically pick your servicer, knowing your rights and keeping your servicer in check are among the most important aspects of managing a loan.
Final Thoughts
Federal loan servicers are major players in the student loan universe. They are Department of Education (ED) partners responsible for counseling borrowers from loan disbursement to loan repayment. But not all reach borrowers, and it is important for borrowers to remain informed, proactive and protective in their management of their loans.
By learning what student loan servicers do, staying in touch, and using the resources available on studentaid.gov. gov, you can help cut through the clutter and get the most benefit out of the federal student loan process.
