Your student loan servicer is the company that is responsible for managing your student loans. The servicer collects payments, answers your questions, and takes care of administrative tasks such as switching your payment plan. But, can you change student loan servicers after borrowing? This is an especially important question for those whose student loan servicers did not renew their contracts with the federal government. If your servicer is one of them, here’s what you need to know about how to switch student loan servicers without affecting your repayment process.
Which student loan servicers didn’t renew their contracts?
Three major student loan servicing companies did not renew their contracts with the Department of Education. As a result, those companies will no longer continue to service federal student loans. The companies include:
- FedLoan
- Granite State Management Resources
- Navient
Because they will no longer be managing the repayment of federal student loans, if you were working with one of them, your student loan servicer will change. The good news is, they are not the first servicers to stop working with the Department of Education. Plus, you will not have to do anything to switch student loan servicers if your existing company chooses not to renew its contract. Instead, the Department of Education will take care of the process and change student loan servicer for you.
How to switch student loan servicers if your servicer didn’t renew
Figuring out how to switch student loan servicers isn’t something you need to worry about if your existing loan servicer didn’t renew their contract. The Department of Education will simply transfer your loans to a new servicer, and you’ll be notified of any necessary next steps. Nothing about your loan will change – your balance, payment obligations, and payment history will remain the same under your new servicer.
How to switch student loan servicers without impacting your credit
Your credit score and credit report should not be affected by a change in student loan servicers. You should continue to make payments to your existing service provider until you receive notification from your new servicer about how to set up your new account and make your first payment with them. Be sure to keep a record of payments and of your outstanding balance just in case anything gets lost or payments are misapplied during the transfer process. And, if you are concerned about how to switch loan servicers because you’re working toward loan forgiveness, contact your new servicer to make sure your record of past payments is still showing up correctly once your account has been moved over.
Can I switch student loan servicers by choice?
You may be wondering if it is possible to change student loan servicers if your existing service provider didn’t end their contract with the Department of Education. If you’re asking, “Can I switch student loan servicers?” because you’re unhappy with your provider’s customer service or support, unfortunately, the process can be complicated. The only way you can change student loan servicers while still maintaining your federal loans is to consolidate them. You can consolidate federal student debt at StudentAid.gov. Consolidation won’t change your interest rate or the other terms of your loan, but it can allow you to change to a new servicer. So, if you’ve asked, “Can I switch student loan servicers?” the answer is yes – if you are eligible for a Direct Consolidation Loan.
Can I switch student loan servicers by refinancing?
It is possible to change student loan servicers by refinancing student loans as well, but keep in mind that you can only refinance with private lenders. As a result, if you’re taking advantage of federal benefits like an Income Driven Repayment (IDR) plan or student loan forgiveness, this may not be the right choice for you. If you have private student loans, though, refinancing can be a great way to change to a new company. Plus, you could potentially adjust the terms of your loan to better fit your financial goals. When you refinance your student loans, you have the chance to improve your interest rate and change your payoff time and other key loan features. This can help make repayment cheaper and easier — especially if you didn’t like your current lender.
