Whenever you take out a federal college loan, you have no control over who becomes your loan servicer. All federal student loan debtors are assigned loan servicers by the Department of Education. Although no current federal student loan servicer is flawless, some have a better reputation than others in terms of student loan payback and other customer service difficulties. If your loan servicer is giving you a hard time, you may be wondering how to switch student loan servicers…the quick answer is that you can change your student loan servicer.
There are only three options to change loan servicers: consolidate your debts, apply for Public Service Loan Forgiveness (PSLF), or refinance your loans with a private lender. Continue reading to find out how to change your student loan servicer. Consolidating your debts into a Direct Consolidation Loan is the most common option to change your loan servicer. Borrowers can combine various federal loans into a single loan using this form of a loan. The new loan has a fixed interest rate based on the weighted average of the rates on the aggregated loans. The following are the processes to consolidate your student debts.
How To Change Your Student Loan Servicer Through Consolidation
1. Make A Loan Consolidation Application.
Filling out the Federal Direct Consolidation Loan Application and Promissory Note is the first step in the transfer process. You can apply online or print a paper application and submit it to the student loan servicer of your choice. When you get down to fill out the application, have your personal and loan information available.
2. Select A New Loan Servicer.
During the application procedure, you might choose a new loan servicer. Make your choice, then complete the remainder of the application and submit it.
Current federal student loan servicers include:
- ECSI
- FedLoan Servicing (PHEAA)
- Missouri Higher Education Loan Authority (MOHELA)
- Navient
- Granite State
- Great Lakes Educational Loan Services
- HESC / EdFinancial Services
- Nelnet
- OSLA
3. Keep Making Repayments
Make payments on your original loan servicer’s student loans until your application is accepted. Once this occurs, your new loan servicer will contact you with information on your new loan payment and any other instructions you should be aware of. If you have several federal loans with separate loan servicers, consolidating your student loans is an excellent option. You can combine qualifying debts into a single loan with a single monthly payment through a service of your choosing.
Now’s the right time to secure a safe education loan! Fill out the form in this blog TODAY!
Changing Loan Servicers With The Help Of PSLF
If you decide to seek Public Service Loan Forgiveness (PSLF), it’s likely that your loan servicer may change. The PSLF is a federal debt forgiveness programme that forgives Direct Loan balances tax-free after 120 qualifying monthly payments under a qualifying repayment plan while working full-time for an eligible firm. Fed loan Servicing is the PSLF program’s official loan servicer. After you apply for PSLF, your loans will be immediately transferred from your former loan servicer to Fedloan Servicing. However, this may change in the near future. FedLoan Servicing stated in July 2021 that it would not like to renew its contract with the Department of Education through December 2021. The PSLF programme will continue to operate, but there is no information on who will be in charge of servicing PSLF payments in the future. Keeping track of PSLF payments may become difficult throughout the shift. This demonstrates the need and practicality of preparing for changes in your college loan servicer, as student loan borrowers will most likely deal with more than one servicer over their repayment journey.
Student Loan Refinancing Allows You To Change Your Student Loan Servicer
Depending on your circumstances, refinancing your student loans may be the best way to change your loan servicer. A private lender pays off your former lender and offers you a new loan with a new interest rate and loan terms when you refinance your student loan.
Your credit score and history, income, and other deciding criteria all play a role in refinancing eligibility. If you have good credit, you may be able to get a loan with substantially cheaper interest rates than your present one. A low-interest rate may save you hundreds of dollars over the life of your loan. You may also cut your monthly payments by refinancing, however, this may result in you paying more for your loan in the long term.
Although there are obvious financial advantages to refinancing student loans, there are also drawbacks. When federal student loans are refinanced, they are converted into private loans. You will lose access to certain federal government safeguards. Income-driven repayment plans, loan deferral and forbearance, and debt forgiveness programmes such as PSLF are examples of these safeguards.
A federal student loan that has been refinanced cannot be converted back to a federal loan. Before you refinance, be sure you have created an emergency fund and have a steady income to cover your monthly payments.
Why Should Borrowers Consider Switching Student Loan Servicers?
Borrowers may seek to change your student loan servicer for a variety of legitimate reasons. Among the possible explanations are:
- Customer service is poor.
- A website that is perplexing.
- Mismanagement of loan payments.
- The loan account information is incorrect.
- Communication breakdown.
- You wish to combine your debts.
- You plan to continue PSLF.
Changing loan servicers may not cure the problem, but it is an alternative if you are dissatisfied with your existing position.
Should You Change Your Student Loan Servicer For Your Student Loans?
Before switching to a new student loan servicer, do your homework. Changing loan servicers isn’t always the solution, and there’s no assurance that a new loan servicer would give better service than your existing one. Check rates while you are trying to figure out how to transfer student loans to another lender. By refinancing your student loans, you might even be able to earn a cash incentive.
PS: If there’s anything more you’d like us to know about. Add it to the comments section!
Thank you for reading this blog on ‘How To Change Your Student Loan Servicer’. If you’d like to read more, here are some blogs that might be of interest to you:
Recent Posts