student loan servicer : Student loans can be confusing, especially when it comes to repayment, interest rates or deadlines. At the center of administering these loans are companies called student loan servicers. These organizations are an important part of how borrowers pay off their loans and stay in good standing. When you know what student loan servicers are, how they function, and how to interact with them, you can help shape your financial future.
What Do Student Loan Servicers Do?
Student loan servicers are entities that manage the billing and other services on federal and some private student loans. After your loan is disbursed and you enter repayment, you will communicate with the servicer. They handle processing your payments, keeping track of your loan balance and applying interest, and they can help you with options such as deferment, forbearance and income-driven repayment plans.
Instead of interacting directly with the federal government, most borrowers work with a student loan servicer over the life of the loan. With private education loans, the lender has the option to service the loan itself or to hire a third-party servicer.
Common Student Loan Servicers
The U.S. Department of Education presently contracts with multiple student loan servicing companies to handle federal student loans. Here are a few of the more typical:
- MOHELA: (Missouri Higher Education Loan Authority)
- Aidvantage (formerly the federal servicing extension of Navient)
- Nelnet
- Edfinancial
- OSLA Servicing
- Great Lakes (Now Nelnet)
And each servicer functions individually but under federal rules to help borrowers. Private loan servicers differ by lender, and as such, the policy and process may be different depending on them.
What a Student Loan Servicer Does
Student loan servicers take on a number of key roles, such as:
- Billing: The service issues you monthly statements, collects payments and then applies them to your loan.
- Customer Service: Servicers answer borrowers’ questions about their loans over the phne or online.
- Status Management: They assist in managing the status of loans, like deferment, forbearance, and in-school deferment.
- Repayment Plan Help: Borrowers who are interested in opting in for different repayment options and are eligible for enrollment through their servicer into plans such as Income-Based Repayment (IBR), PAYE, or SAVE.
- Fogiveness Programs: Servicers are also responsible to monitor and determine eligibility for federal loan forgiveness programs like Public Service Loan Forgiveness (PSLF).
Why Your Student Loan Servicer Is Important
Your relationship with your student loan servicer is critical to your repayment success. A servicer that is responsive and helpful can make dealing with your loan easier. Conversely, bad communication or mistakes in billing can result in missed payments, harm to your credit or a loss of eligibility for forgiveness.
You should stay in touch with your servicer on a regular basis, especially if you experience a change in income, lose your job or expand your family, all of which can affect your repayment plan or eligibility for certain relief options.
How to Track Down Your Student Loan Servicer
If you are uncertain about who services your federal student loans, you can determine that by going to the Federal Student Aid website at studentaid. gov. After logging in, look at your dashboard to view the name and contact information of your loan servicer.
For private loans, refer to your original loan agreement or contact your lender directly to determine what company services your loan.
Talking to your servicer like a human.
Here are a few tips to keep in mind when interacting with your student loan servicers:
- Record Keeping: Always, always, always keep phone record logs, emails, and letters. Remember times, dates, and the representative’s name.
- Update Your Information: You don’t want to miss a message from us!
- Take Action: Don’t wait on issues. If you’re in a tight financial spot, make sure to contact them early to examine alternative payment options.
- Write requests: If you need to request deferment, forbearance or a particular repayment plan get those requests in writing so you have recourse.
Common Issues Borrowers Face
Most student loan servicers are well-intentioned, but there are many issues borrowers face including:
- Misapplied Payments: Payments are sometimes applied to the wrong loan or are not properly split among multiple loans.
- Inaccurate information: Some borrowers say they have received mixed messages about their repayment plans or about whether they qualify for forgiveness.
- Communication: The waiting time, the list of unanswered calls or unclear guidelines can leave you frustrated.
- Forgiveness Issues: PSLF borrowers have historically encountered issues with servicers failing to count qualifying payments or employment certification forms.
To protect yourself, monitor your loan statements regularly, verify your payment history and file complaints with the Consumer Financial Protection Bureau (CFPB) if necessary.
A New Servicer for Student Loans
Occasionally, loans are transferred from one servicer to another. This can occur either with Department of Education decisions, or in mergers or contract changes. When this occurs:
- You will be notified by both the old and new servicer.
- Your terms, amount and interest won’t change.
- You should also verify that the new servicer has all your most recent information and records of payments on your loan.
You can’t typically select your servicer for federal loans (except in the case of a “Direct Consolidation Loan” in which you choose a new loan servicer).
Navigating Repayment Options
There are several federal student loan repayment plans, which you may have access to if you took out federal loans to pay for your education:
- Standard Repayment: Fixed payments over 10 years A direct Consolidation loan is a government load issued to consolidate more than one federal student loans into one loan.
- Graduated Repayment: Payments are kept low in the beginning, then increase every two years.
- Income-Driven Repayment (IDR) Plans such as SAVE, PAYE and IBR limit payments to a portion of discretionary income.
- Extended Repayment: Offers up to 25 years to pay back the loan.
Your servicer can guide you through the process of comparing plans and enrolling in one that is right for your financial situation.
Student Loan Forgiveness and These Servicing Companies
Other programs, such as Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness, will necessitate working closely with your student loan servicer. You’ll need to:
- File an Employment Certification Form annually.
- Make sure you’re signed up for an eligible repayment plan.
- Serve an eligible employer and make 120 qualifying payments (for PSLF).
Your servicer can assist in following your progress and in providing the appropriate documentation, so accuracy is crucial to your success.
Final Thoughts
Learning the ins and outs of student loan servicers and their role in your loans is an important part of handling educational debt. From processing payments to helping borrowers navigate labyrinthine repayment options, these companies are so much more than bill collectors — they are at the heart of your post-college financial landscape.
Remaining up-to-date with potential changes and keeping thorough records will prevent pitfalls and help to keep your loans in optimal working order. Whether you are working toward repayment, deferment, or forgiveness, your loan servicer is a critical partner on the road to financial wellness.
