Wednesday, June 15, 2022

Which Student Loan Servicer Is Best

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What Are Federal Student Loan Servicers

$1.8 billion settlement with student loan servicer

The government provides the education loan when you apply for federal student aid, but they dont deal with the loan afterward. That job is handed over to a loan servicer.

Most people with student loans have more than one loan since you have to reapply for a new loan for each semester that you need one. Despite this, you might only make one or two payments from your bank account for eight loans. This is because your loan servicer takes your monthly payments and distributes them between your different loans.

Servicers also offer a variety of repayment options to make it easier to repay your student loans if youre having trouble making your monthly payments. They do this in a few ways:

  • Working out flexible repayment plans as your ability to pay changes
  • Allowing you to temporarily halt your autopay payments if you fall on hard times
  • Offer loan forgiveness for those working in non-profits or the public sector once they meet the requirements

However, its not all rainbows and unicorns. As is often the case when an organization doesnt have to vie for your business, customer service is poor and management is haphazard. Whats worse, they dont really care to do anything about improving it.

There are only a handful of student loan servicers to choose from and you dont even get to pick anyway. Youre assigned a servicer by the U.S. Department of Education when you take out your loan.

Student Loan Servicing: What Does This Mean

You may be wondering why a third-party company is servicing your student loans at all. Plus, what does “servicing” really mean in this context anyway?

According to the U.S. Department of Education, a loan servicer is “a company that we assign to handle the billing and other services on your federal student loan on our behalf, at no cost to you.”

In other words, government offices have made the decision to outsource the grunt work of loan processing to other companies.

Not only is this company charged with sending out your monthly bill and tabulating any payments you make on your federal student loans, but they can also help you get situated with your chosen repayment plan, whether you want to stick with standard 10-year repayment or switch to an income-driven repayment plan.

Which Student Loan Servicers Are Changing

Loan servicers might choose to transfer their loans or leave the servicing industry entirely in some cases. For example, if they cant make enough money through loan servicing or have contractual disagreements, a servicer might opt to not renew their contract with the Department of Education.

Tip:

While servicers dont tend to leave the industry often, three servicers have announced that they wont be renewing their contracts with the Department of Education, including:

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Four Student Loan Servicers: Ranked

Weve already established that none of the student loan servicers do a fantastic job, but some are better than others.

To find out the rankings, we looked at the number of complaints that customers registered with the Consumer Financial Protection Bureau for each company compared to the number of customers they have. From there, we extrapolated the number of complaints per million customers to create a fair metric by which to compare the companies.

Private Student Loans With Sofi

Your Federal Student Loan Servicer May Be Changing

The loan servicer on a private student loan is typically the lender. Private loans can be helpful for students looking to fill funding gaps when federal aid and scholarships arent enough to pay for tuition. They dont always offer the same benefits as federal student loans, like options for deferment or the ability to pursue Public Service Loan Forgiveness, so they are generally considered only if a student has closely reviewed all other options.

SoFi provides private student loans for undergraduate and graduate students, or their parents. These loans have no fees and borrowers have the option of four flexible repayment plans. When you borrow a SoFi student loan, SoFi is your loan servicer. Borrowers are able to make payments directly in the SoFi app or online and have access to 24/7 customer service.

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Best Federal Student Loan Servicer Ranking Methodology

To come up with our list, we began by downloading data from all the student loan servicer complaints that the Consumer Financial Protection Bureau received from May 1, 2018 to May 1, 2019.

Next, we took data from the Department of Educations Federal Student Aid website to determine the number of recipients for each servicer.

Finally, we divided each servicers number of complaints by their number of recipients and multiplied the result by one million. This gave us the number of federal student loan complaints per one million loan recipients.

Student Loan Servicers: Who They Are And What They Do

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A federal student loan servicer is the middleman between you and the federal government that lent you money for college. Getting to know your servicer is the secret weapon in the battle to get rid of your loans.

Student loan servicers collect your student loan bills and keep track of whether you pay them on time. They also help borrowers switch repayment plans, certify for forgiveness programs and sign up to postpone loan payments.

» MORE:How to change your student loan servicer

Your servicers job is to help keep your loans in good standing by giving you the support and resources you need. But they’re also private companies, which means they may offer choices that are not best for the borrower. You have to be your own advocate by knowing your repayment options and asking questions.

» MORE:What federal student loan servicing companies might not tell you

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What Can You Do If Your Servicer Is Among The Worst Of The Worst

If youve been assigned one of the most hated federal loan servicers, you may be wondering if you can switch to one of the better servicing companies.

Unfortunately, the short answer is no. The Department of Education doesnt let borrowers switch student loan servicers. There are only two ways that you can choose a new servicer than the one youve been assigned.

How Does The Loan Servicer Work For Private Loans

The 9 Best Student Loan Servicers Ranked | Student Loan Planner

If you hold private student loans from a bank, the Credit Union is more or less a transparent loan servicer who oversees the activities.

Private lenders service the loans by themselves and then they contract the third-party servicer to manage the student loan. Under any circumstance, you are not allowed to choose your servicer.

Getting hold of your original paperwork is the best thing to do after taking out your private student loan.

Down the lane of starting repayment, after certain years, you are most likely to get in touch with the servicer who sends you bills, collects it, and processes your payments. It is also possible that your loans are sold by your lender. The current owner of your loan might not be a bank or financial institution.

For a Federal student loan, the servicer does many other things like modifying your repayment plans or setting you up for loan forgiveness.

Private loans don’t go under the same regulations and you cannot assume that they will also offer you these student loan services. These loans are less flexible in adjusting your payments. If you are struggling to repay your loan, get in contact with your servicer on what he/she can do for you.

If you find yourself dissatisfied with the private loan servicer then try to resolve the situation with the servicer. You are still free to contact the CFPB for any help you may need.

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We believe everyone should be able to make financial decisions with confidence. And while our site doesnt feature every company or financial product available on the market, were proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.Here is a list of our partners.

What Does My Loan Servicer Do

Your loan servicers main job is to act as an intermediary between you and your lender. The lender is the one that provided the money for you to pay for college. Now, youll work with the student loan servicer to repay the lender.

The loan servicer does several things, including:

  • Collecting and tracking your monthly student loan payments
  • Offering support to customize your loan payments, such as changing from the Standard Repayment Plan to an Income-Driven Repayment Plan
  • Assessing your eligibility for student loan forgiveness programs, and
  • Assisting lenders with deferment or forbearance.

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Your Student Loan Servicer Changed: What Now

With three federal student loan services leaving the servicing industry, heres what to know about changing your student loan servicer.

Edited byAshley HarrisonUpdated April 5, 2022

Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. By refinancing your mortgage, total finance charges may be higher over the life of the loan. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

In some cases, the Department of Education will transfer federal student loans from one servicer to another for example, if a loan servicer will no longer manage federal loans, or if you sign up for a program like Public Service Loan Forgiveness .

In this situation, the Department of Education will notify you by mail or email that your federal loans are being transferred. The notice will include your new servicers name and contact information. If this happens, its a good idea to check the National Student Loan Data System to verify the servicer for each of your federal student loans.

Heres what you should know about student loan servicer changes and how they work:

Which Federal Student Loan Servicer Is The Best

The Big 7: A Complete List of Federal Student Loan Servicers

For a number of reasons, it is difficult to say who the best federal student loan servicer is. As mentioned above, you generally cannot request a new student loan servicer.

Borrowers arent able to compare the different loan servicers, but lets take a look at how many complaints each servicer has.

Servicer
5.416,112

Note: Federal Student Aid does not issue data for each not-for-profit student loan servicer. We only have the totals for all not-for-profit servicers, which is what you see above.

Not-for-profits tend to have fewer complaints than for-profit student loan servicers in the CFPBs Complaint Database. The servicer with the fewest complaints listed is OSLA, with only 45 complaints.

Navient has by far the most complaints, with over 30,000. This is despite the fact that they have the smallest portfolio of the for-profit federal student loan servicers.

Out of the not-for-profits, MOHELA has by far the most complaints, with 546.

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Contact Customer Support When You Need Help

If you need help with your loans, either because you think your payment wasnt applied appropriately or you cant afford your payments, contact Great Lakes as soon as possible. Contacting them early is key to preventing major issues, like student loan default, from developing.

Great Lakes customer support is available by calling 800-236-4300, or you can submit a secure message online.

Customer service is available Monday through Friday from 7:00 a.m. until 9:00 p.m. CST.

What Do Loan Servicers Do

Loan servicers are companies that manage the different facets of student loan repayment. They administer the loan, collect payments, can assist and can provide assistance to customers with questions related to their student loan repayment.

  • Mon-Thu 5:00 AM – 7:00 PM PT
  • Fri-Sun 5:00 AM – 5:00 PM PT

Home Loans General Support:

  • Mon-Fri 6:00 AM 6:00 PM PT
  • Closed Saturday & Sunday
  • Mon-Thu 8:00 AM 8:00 PM EST
  • Fri 8:00 AM – 7:00 PM EST
  • Closed Saturday & Sunday
  • Mon-Thu 5:00 AM – 7:00 PM PT
  • Fri-Sun 5:00 AM – 5:00 PM PT

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How To Complain About Your Student Loan Servicer

Itâs not uncommon to have problems with your loan servicer. The federal student loan program is complex, and there are a lot of student loan borrowers. Your first thought may be to hire a student loan lawyer to sue. But thatâs usually not your best option.

Instead, if you run into a problem with your servicer, file a complaint with its highest customer service unit . Maintain records of conversations with your servicer along with letters, emails, and billing statements. If youâre unable to fix the problem with your servicer, you can use that information to file a complaint with:

How To Apply For Tepslf

Navient exits federal student loan servicing, here’s how your loans will be affected #shorts

Heres how to get started if you fulfill the eligibility conditions and wish to apply for TEPSLF:

Fill out the PSLF application. Then, by using the PSLF Help tool or downloading the form to complete it entirely on your own, you may locate the PSLF & TEPSLF Application.

Submit your application. You will send the PSLF form to FedLoan Servicing once it is completed.

Provide more information. FedLoan Servicing will notify you if any more information is required. You have only 21 days from the time you get the notice to submit the required information before your TEPSLF request is canceled.

Wait for a response. FedLoan Servicing will tell you if you are eligible for forgiveness under TEPSLF, and your outstanding loan sum will be forgiven. After your 120th payment, any overpayments will be repaid. If you are not eligible, you will be notified as well. If thats the situation, you must continue to make student loan installments.

Until you get your student loan forgiveness, you need to manage your student loans. The following section will show you practical student loan management tips.

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$50000 Of Student Loan Cancellation Could Help Boost The Economy

Its no secret that the economy is struggling. Theres significant inflation. The stock market has been hammered. Layoffs have started. Biden could increase the amount of student loan cancellation to help student loan borrowers weather the economic storm. Advocates of student loan cancellation say student loan forgiveness will stimulate the economy. If Biden cancels $50,000 of student loan debt, it could also help financially vulnerable student loan borrowers who want a fresh start on their student loans or who are more prone to enter student loan default when student loan payments restart.

How To Get The Best Student Loan Interest Rate

Federal loan servicers are entities that the U.S. Department of Education contracts with to provide various services related to federal student loans.

There are three primary services that federal loan servicers provide:

Customer service: This includes answering borrowers questions about their loans, helping them understand their loan repayment options, and processing payments.

This includes answering borrowers questions about their loans, helping them understand their loan repayment options, and processing payments. Loan management: This includes tracking borrower payments and loan balances, sending reminders about payments due, and working with delinquent borrowers on their loans.

This includes tracking borrower payments and loan balances, sending reminders about payments due, and working with borrowers who are delinquent on their loans. Default prevention includes helping borrowers stay on track with their loan payments and preventing defaults.

There are many different federal loan servicers, and it can be unclear to know which one to use. So, what are federal loan servicers, and why should you use one?

Federal loan servicers are companies that the Department of Education contracts with to help borrowers manage their student loans. This includes answering borrowers questions about their loans, helping them understand their loan repayment options, and processing payments.

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Next Generation Fsa Platform

The Department of Education has been working on a project to create a single phone number, email, and mailing address for communications between the loan servicers and borrowers. The goal is to ensure that you get consistent messages about your loans, no matter which servicer was assigned to your account. The Department refers to this effort as NextGen Federal Student Aid .

Five servicers were selected to be a part of this new platform:

  • Edfinancial Services, LLC.
  • Missouri Higher Education Loan Authority
  • Texas Guaranteed Student Loan Corp

The NextGen platform has not yet fully launched. However, a handful of changes have made their way to studentaid.gov.

Who is the new federal student loan servicer? The Department of Education has begun moving student loan borrowersâ accounts from FedLoan and GSMR to Nelnet and Great Lakes. Navient has already started to send its Department-held accounts to Maximus.

Can I Choose My Federal Loan Servicer

Which Student Loan Servicer is Best? 2021 Update

Borrowers do not typically choose their loan servicers. The federal government assigns them. The DOE scores each servicer every three months, based on its success collecting loan debt and satisfying customers. The higher the score, the more loans the government assigns that servicer.

Generally, your loan servicer will contact you after a loans first disbursement. You can always find your loan servicers name by logging into your account on the Federal Student Aid website.

You should create an account on your servicers site, and then connect it to your bank account when you need to start making payments. Most servicers reduce the interest rate by .25% if you set up automatic payments, which can save you upwards of $1,000 in total payments, depending on the amount you owe and the loans term.

Over the life of your loans, the DOE may reassign your servicer for a variety of reasons. That doesnt alter your payments, and your records will automatically transfer. If your loan is reassigned, your new servicer will contact you and give you information about payments moving forward.

If youve enrolled in the Public Service Loan Forgiveness program, FedLoan Servicing will manage your loan. Another servicer may have started the enrollment process, but the loan is transferred once youre in the program.

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