What Is a Loan Servicer, and How Does It Help With Federal Student Loans?

A student loan servicer is a company that performs administrative tasks on behalf of a lender, such as the U.S. Department of Education. These companies send out bills, disburse money and collect payments from borrowers. If you ever have questions about your student loans, your loan servicer will provide the answers.

Here are four questions we’ll answer, along with some additional FAQs at the end:

What is a loan servicer? What does a student loan servicer do? How do you find your student loan servicer? What are the current 11 student loan servicing companies? Student loan servicer FAQ What is a loan servicer?

Loan servicers work on behalf of the loan’s lender, and for federal student loans, the government is the lender. These companies collect payments, adjust repayment plans, track repayment and deal with other loan administration tasks. Loan servicing companies serve as a federal student loans contact for borrowers. If you have questions about your loans, a federal student loan specialist from your loan servicer will help you.

What does a student loan servicer do? Disburse loan payments Track loans when borrowers are in school Send monthly bills Collect student loan payments Adjust repayment plans Grant deferment or forbearance Track progress towards loan forgiveness Discuss cancellation or discharge Plus: 5 student loan servicer warning signs Disburse loan payments

When students take out loans, the loan servicing company disburses proceeds to the borrower.

Track loans when borrowers are in school

While you’re in school, loan servicers will keep track of your account information, including the loan balances. Borrowers who have questions about how to view federal student loans can ask their loan servicer for help.

Send monthly bills

Loan servicers send monthly bills to borrowers. It’s important to keep your address or email address up to date with your loan servicer, so that way the loan servicer can send your bill to the correct location.

Collect student loan payments

When you pay back your student loans, you won’t be paying the Department of Education directly. Instead, loan servicing companies collect student loan payments on behalf of the government. If you want to set up automatic debits for your student loans, you can do so through your loan servicer.

Adjust repayment plans

If you cannot afford the monthly payment for a standard 10-year repayment plan, your loan servicer can help you enroll in an income-driven repayment plan. Income driven-repayment plans are designed to make student loan repayment more affordable.

Your loan servicer should be knowledgeable about these plans, but you may want to do some research ahead of time to figure out what plan works best for you. This Department of Education loan simulator can help you find a plan with a payment that fits into your budget.

Grant deferment or forbearance

During a loan deferment or forbearance, borrowers can temporarily stop making payments on their student loans. Loan servicers allow borrowers to request deferment by filling out a form and providing documentation that proves the borrower is eligible. During deferment and forbearance, interest generally continues to accrue on your loans. Whether you have to pay it back depends on your loan type and your relief option.

Loan forbearance doesn’t usually involve interest forgiveness, so unpaid interest is added to the loan balance at the end of forbearance (unless you pay it throughout the forbearance). In contrast, borrowers may or may not be responsible for paying back unpaid interest during deferment. Borrowers deferring subsidized loans, such as direct subsidized loans or Perkins loans, aren’t responsible for unpaid interest during a deferment. However, interest on unsubsidized loans accrues during deferment, and the unpaid interest on unsubsidized loans is then capitalized (added to the loan balance) at the end of the deferment period. Borrowers who will be responsible for unpaid interest may want to look into income-driven repayment plans before pursuing deferment or forbearance.

Track progress towards loan forgiveness

If you’re working towards student loan forgiveness, you’ll need to work closely with your loan servicer. Different loan forgiveness programs are administered by different loan servicers. For example, TEACH grants and Public Service Loan Forgiveness are only administered by FedLoan Servicing. The Teacher Loan Forgiveness Program, however, can be administered by any federal loan servicing company, so teachers would be able to stick with their given loan servicer or servicers.

Discuss cancellation or discharge

Student loans can be discharged due to unforeseen circumstances, such as bankruptcy, total disability or death. Your loan servicer can provide information on whether you may qualify for cancellation or discharge. A loan servicing specialist can also explain how to apply for certain types of discharge.

Loans can also be canceled after 20 to 25 years of on-time payments under qualified income-driven repayment plans. Your loan servicing company will track your progress towards this type of loan cancellation.

5 student loan servicer warning signs Misallocated payments Bad advice surrounding repayment options during financial hardship Delays when changing repayment plans Incorrect reporting to credit bureaus Harassment from debt collectors How do you find your student loan servicer?

Your student loan servicer will contact you when your loan is first paid out to you. Lost track of yours? You can find your student loan servicer by logging into the “My Federal Student Aid” website. Borrowers who haven’t created a Federal Student Aid (FSA) ID will need to create an account before logging in. Once you’re logged into the site, you’ll see details about all your loans, including which federal loan servicing company handles the loan administration.

What are the current student loan servicing companies?

As of early 2020, there were 10 official Department of Education loan servicing companies, and one additional company dedicated to resolving loans in default. Below you will see the contact information for all official loan servicing companies. Note, however, that change is afoot: The government is currently making changes to its roster of loan servicers as it seeks to improve the way it administers student loans — see this post for more information.

CornerStone ECSI EdFinancial Services (HESC) FedLoan Servicing (PHEAA) Granite State (GSMR) Great Lakes Educational Loan Services Mohela Navient Nelnet Oklahoma Student Loan Authority Servicing (OSLA) Default Resolution Group CornerStone CornerStone website Telephone number: 800-663-1662 Email: customerservice@mycornerstoneloan.org Hours of operation: Monday through Thursday, 6:00 a.m.-7:00 p.m./Friday, 6:00 a.m.-5:00 p.m. (Mountain time) ECSI ECSI website Telephone number: 866-313-3797 Email: webcservice@ecsi.net Hours of operation: Monday through Friday, 7:30 a.m-8:00 p.m. (Eastern time) EdFinancial Services (HESC) HESC/EdFinancial website Telephone number: 855-337-6884 Email: customerservice@edfinancial.com Hours of operation: Monday through Thursday, 8:00 a.m.-8:30 p.m./Friday, 8:00 a.m.-6:00 p.m. (Eastern time) FedLoan Servicing (PHEAA) PHEAA website Telephone number: 800-699-2908 Email: accountinfo@myfedloan.org Hours of operation: Monday through Friday 8:00 a.m.-9:00 p.m. (Eastern time) Granite State (GSMR) GSMR website Telephone number: 888-556-0022 (direct loans), 800-719-0708 (for Family Federal Education Loans) Email: DLCustomerService@GSMR.org Hours of operation: Monday through Friday, 8:00 a.m.-6:00 p.m. (Eastern time) Great Lakes Educational Loan Services Great Lakes Educational Loan Services website Telephone number: 800-236-4300 Email: BorrowerServices@glhec.org Hours of operation: Monday through Friday, 7:00 a.m.-9:00 p.m. (Central time) Mohela Mohela website Telephone number: 888-866-4352 Email: Mohela provides a secure messaging platform here. Hours of operation: Monday through Thursday, 7:00 a.m.-9:00 p.m./Friday, 7:00 a.m.-5:00 p.m. (Central time) Navient Navient website Telephone number: 800-722-1300 (U.S. Department of Education loans), 888-272-5543 (Federal Family Education Loan Program/Health Education Assistance Loans) Email: Borrowers can log into the site and email using the Email Us feature in the Help Center. Hours of operation: Monday through Thursday, 8:00 a.m.-9:00 p.m./Friday, 8:00 a.m.-8:00 p.m. (Eastern time) Nelnet Nelnet website Telephone number: 888-486-4722 Email: Borrowers can fill out a secured webform to consult about their loans. Hours of operation: Monday through Friday, 8 a.m. to 10 p.m. (Eastern time) Oklahoma Student Loan Authority Servicing (OSLA) Oklahoma Student Loan Authority website Telephone number: 866-264-9762 Email: DLcustserv@osla.org Hours of operation: Monday through Friday, 8 a.m. to 5 p.m. (Central time) Default Resolution Group

This is a company that deals with student loans in default.

Default Resolution Group Website Telephone number: 800-621-3115 Email: Default Resolution Group provides a secure portal for email inquiries. Hours of operation: Monday through Friday, 8:00 a.m.-10:00 p.m./Saturday, 8:00 a.m.-6:00 p.m. (Eastern time) Student loan servicer FAQ

Can I choose my student loan servicer?

When you first take out a student loan, you cannot select a loan servicing company. The U.S. Department of Education assigns servicers to borrowers, and the Department of Education may even transfer your loans from one servicer to another. Unfortunately, there are only a few ways to switch servicing companies.

Can I switch my student loan servicer?

If your loan servicer gives you problems, you may have a way out. Borrowers can change loan servicing companies by consolidating their loans. When you apply for a direct consolidation, you have the option to choose your loan servicer.

When should I contact my student loan servicer?

Loan servicers exist to help borrowers, so you should feel free to contact your loan servicer whenever you have a question about your student loans. Additionally, you’ll need to contact your loan servicer anytime you change mailing addresses or other contact information.

How do I file a complaint against my student loan servicer?

One of the best ways to file a complaint against a loan servicing company is through the Department of Education’s Federal Student Aid Feedback System. Borrowers can also complain through the Consumer Financial Protection Bureau’s complaint site. Be sure to provide documentation and clear evidence when you file your complaint.

Kali Hawlk contributed to this report.

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