Nelnet And Great Lakes Won’t Service Your Federal Student Loans
When Nelnet or Great Lakes service the federal student loans of yours, you might get a brand new pupil loan servicer.
Here’s what you have to know.
nelnet and Great Lakes, which are part of the same company and jointly service federal student loans for approximately 13 million student loan borrowers, could not anymore service federal student loans after December 2020. The surprise announcement comes as the U.S. Department of Education, led by Education Secretary Betsy DeVos, seeks to improve student loan servicing. What’s a pupil loan servicer? If you pay federal student loans, you do not spend the federal government or Department of Education directly. Instead, you pay your student loan servicer, which collects the student loan payments of yours and provides customer support.
This’s another key step toward our commitment to improving customer support and holding our contractors responsible for the performance of theirs, DeVos said. Pupils, parents, borrowers, as well as schools deserve a world-class experience when managing [Federal Student Aid], and I’m confident that FSA has employed the companies with the know how, expertise and experience to give that.
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On June 24, the Department of Education announced that Federal Student Aid – which provides greater than $120 billion of financial aid to greater than 68 million pupils across 5,800 postsecondary institutions per year – signed contracts with 5 pupil loan servicers to service federal student loans and also give enhanced consumer support:
Edfinancial Services LLC
F.H. Cann & Associates LLC
MAXIMUS Federal Services Inc.
Missouri Higher Education Loan Authority (MOHELA)
Texas Guaranteed Pupil Loan Corporation (Trellis Company)
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What you should Know About Your Pupil Loan Servicer
DeVos wishes to streamline and simplify pupil loan repayment. Under DeVos’ new strategy, you might begin making student loan payments by way of a centralized platform, studentaid.gov, rather than through the individual pupil loan servicer sites. DeVos feels the current pupil loan servicing structure lacks accountability and consistency, which hurts student loan borrowers.
Nelnet: We are shocked We’re surprised that the 2 highest rated servicers and the committed employees that are accountable for getting those rankings won’t looked into by the Department due to this agreement, Nelnet CEO Jeff Noordhoek said. We’re frustrated as well as disappointed by this choice and the absence of transparency in the task and often will engage in every legal avenue readily available to make sure that pupils have the good quality service they’ve come to expect from us.
In June 2009, the Education Department awarded Nelnet pupil loan servicing contracts. As of March 31, 2020, Nelnet was servicing $185.5 billion of pupil loans for 5.5 million borrowers under the contract of its, and Great Lakes was servicing $243.2 billion of pupil loans for 7.3 million borrowers under its contract. These servicing contracts expire on December 14, 2020 with two optional six month extensions through December 14, 2021. Separately, Nelnet services $48.7 billion in FFELP, private schooling as well as consumer loans for 2.1 million borrowers which aren’t influenced by the Education Department’s decision.
The thing you need to do next
When Nelnet or Great Lakes service your federal pupil loans:
Do not panic.
Always keep making your regular monthly student loan payments to Great Lakes or perhaps Nelnet.
You don’t need to apply for a brand new pupil loan servicer.
The Education Department will assign you a brand new student loan servicer and can communicate with you in advance of any transition.
After you’re informed of your new student loan servicer, you’ll be able to start sending student loan payments to your new pupil loan servicer.
Once that happens, be sure to update car payments.
How you can pay off pupil loans more quickly If you have pupil loans, ensure to use a game plan. What is the easiest way to pay off pupil loans quicker? Start with these 4 options, every one of which have no fees: