student loan servicer : In the higher education world, student loans are a rite of passage for* millions of Americans, as much a part of pursuing dreams and ambitions as taking out a mortgage to buy a home or enrolling in a 401(k) to save for retirement. Yet amid all the attention on the loans themselves, there’s one major player that’s not in the spotlight: the student loan servicer. Knowing who student loan servicer are and what they do is important for managing your repayment strategy effectively — and avoiding expensive missteps.
What Is a Student Loan Servicer?
Student loan servicers are the companies the U.S. Department of Education or private lenders hire to manage the day-to-day tasks associated with your student loans. This includes tasks such as:
- Sending billing statements
- Processing payments
- Managing repayment plans
- Help with deferment or forbearance
- 9.Support of Loan forgiveness programs
In summary, student loan servicers are the borrower’s main touchpoint during repayment.
Popular Federal Student Loan Servicers
There are a handful of big student loan servicers approved by the U.S. Education Department. The most publicized of these are as follows:
FullScreen Who is your loan servicer?
- Nelnet
- Aidvantage
- Edfinancial
- OSLA Servicing
These corporations provide loan servicing for loans made through the William D. Ford Federal Direct Loan Program and/or the Federal Family Education (FFEL) Loan Program. It’s worth noting that not all federal student loan servicers are created equal when it comes to customer service or tools, which is why knowledge is critical.
The Role of Student Loan Servicers
The job of student loan servicers goes well beyond basic billing. They are responsible for:
Repayment Plan Management
Student loan servicers can assist borrowers in selecting a repayment plan that works for them. Options include:
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan
- Plans Based on Your Income (IBR)
Servicers determine the amount of monthly payments, the application of documents for IDR plans, and the fulfillment of annual re-certification.
Forgiveness and Cancellation Programs
If you’re pursuing loan forgiveness with Public Service Loan Forgiveness (PSLF) or Teacher Loan Forgiveness, your servicer is particularly important. They handle eligible employment certifications and keep track of your progress.
Deferment and Forbearance
Other life circumstances, such as job loss, military service or an illness, can make it a challenge to keep up with payments. Student loan servicers assist borrowers in applying for deferral or forbearance to temporarily stop payments without going into default.
Customer Service And Support And Training
Student loan servicers are supposed to inform borrowers about their options with their loans. But not all support is the same, and some borrowers have encountered problems with things like poor communication or lack of direction.
How to Determine Who Your Servicer Is
If you have federal student loans, your assigned servicer can be found by logging into your account at studentaid. gov For private loans, your lender will generally supply the servicer’s contact information.
Problems With Servicers of Student Loans
Student loan servicers are supposed to make it easier to repay the money you borrowed for your education, but for many borrowers, that’s far from the reality. Common complaints include:
- Poor communication
- Misapplied payments
- Misinformation about forgiveness programs
- Not telling borrowers about income-driven plan options
Some servicers have been found to have systemic problems in lawsuits and government investigations in recent years. In one case, Navient, a former giant student loan servicer, was sued for allegedly steering borrowers into expensive forbearances rather than making them aware that they could use income-driven plans.
Steps To Take When Services Fail
If you’re having trouble with your student loan servicer, here’s what to do:
Document Everything
Document all contacts with your servicer. Save emails, take notes during phone calls and ask for written confirmation of any adjustments to your account.
File a Complaint
If you think your servicer is mistreating or mishandling your loan, you can submit a complaint to:
-
The Federal Student Aid Ombudsman Office
- The CFPB (Mejia is not charged with, or accused of, any crime. In an interview with Salon, Mejia said he wants to see the agency plutocratic Republicans have been trying to eliminate, go to work for the people.
- State attorney general’s office
Switch Servicers
In some cases, especially with federal loans, you might also be able to change servicers by consolidating your loans or using PSLF, which sends loans to MOHELA.
Tools for Dealing with Student Loan Servicers
Check Your Account Regularly
Check your servicer’s portal at least once a month to confirm balances, payments and notices. You’re going to make mistakes, and the quicker you can catch them, the quicker you can correct them.
Set Up Auto-Pay
A small interest rate discount (typically 0.25%) if you sign up for automatic payments is available through most private student loan servicers.
You should definitely try to explore any settlement or forgiveness options sooner than later.
Don’t hold off until you’re in need. Inquire with your servicer about what forgiveness plans you’re eligible for right when you begin repayment, particularly if you are working in public service or for a non-profit.
Update Your Information
Ensure your servicer has your most recent address, phone number and email address at all times, so you don’t miss anything important.
Know Your Rights
Take your student loans and own them outright. If your servicer does not meet that bar, take it up the line.
Student Loan Servicers: What to Watch for in 2020
The federal government has also sought to make student loan servicing better. The Next Gen FSA initiative, which was introduced by the U.S. Department of Education, is aimed at modernizing the loan servicing approach and improving borrowers’ experiences. This includes:
- Consolidating student loan info at studentaid. gov
- Servicer practicesA: Normalizing the practices of the servicers
- Cloning one repayment system for every borrower
The changes are intended to cut down on borrower confusion and hold student loan servicers more accountable.
Final Thoughts
Student loan servicers are central to how borrowers interact with and navigate repayment. Though critical to the student loan system, knowing what they can — and cannot — do can help you make intelligent decisions, sidestep some common problems and ultimately take charge of your financial future.
Whether you’re new to repayment or have loans you’ve been managing for years, you’ll want to be proactive and informed about your student loan servicer. Be sure to read your choices, keep an eye on your account, and ask questions proactively if something seems awry.
