Nelnet And Great Lakes Will not Service Your Federal Pupil Loans
When Nelnet or Great Lakes service the federal student loans of yours, you may get a brand new student loan servicer.
Here is what you have to understand.
Great Lakes and nelnet, which are actually a part of the same business and collectively service federal student loans for around thirteen million pupil loan borrowers, could perhaps no longer 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 pupil loan servicing. What is a student loan servicer? If you pay federal student loans, you do not pay the federal government or maybe Department of Education directly. Rather, you pay the student loan servicer of yours, which collects your student loan payments and supplies customer care.
This’s another major step toward the dedication of ours to improving customer care and holding our contractors responsible for their performance, DeVos said. Pupils, parents, borrowers, as well as schools deserve a world-class encounter when addressing [Federal Student Aid], and I am confident that FSA has hired the companies with the expertise, expertise and experience to deliver that.
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On June 24, the Department of Education announced that Federal Pupil Aid – which provides more than $120 billion of financial aid to more than 68 million students across 5,800 postsecondary institutions each year – contracts which are signed with five student loan servicers to service federal student loans and also give enhanced customer support:
Edfinancial Services LLC
F.H. Cann & Associates LLC
MAXIMUS Federal Services Inc.
Missouri Higher Education Loan Authority (MOHELA)
Texas Guaranteed Student Loan Corporation (Trellis Company)
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DeVos would like to streamline as well as simplify pupil loan repayment. Underneath DeVos’ new strategy, you might begin making pupil loan payments through a centralized platform, studentaid.gov, rather than through the unique pupil loan servicer sites. DeVos believes the present student loan servicing system lacks accountability and consistency, which hurts pupil loan borrowers.
Nelnet: We are surprised We are surprised that the two highest rated servicers and also the dedicated employees that are responsible for achieving those rankings won’t be looked at by the Department because of this agreement, Nelnet CEO Jeff Noordhoek said. We’re frustrated and disappointed by this selection and the absence of transparency in the task and can engage in every legal avenue available to ensure that pupils have the good quality service they have 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 student loans for 5.5 million borrowers under its contract, 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 2 optional six-month extensions through December 14, 2021. Separately, Nelnet services $48.7 billion in FFELP, private education and customer loans for 2.1 million borrowers which aren’t influenced by the Education Department’s decision.
What you need to do next
If Nelnet or perhaps Great Lakes service your federal student loans:
Do not panic.
Always keep making your regular monthly pupil loan payments to Nelnet or Great Lakes.
You don’t need to apply for a new student loan servicer.
The Education Department will assign you a new pupil loan servicer and often will speak with you in advance of any change.
Once you’re informed of your brand new pupil loan servicer, you can begin driving student loan payments to your new pupil loan servicer.
As soon as that happens, ensure to update auto payments.
How to pay off student loans faster If you have student loans, be sure to end up with a game plan. What is the best way to pay off pupil loans quicker? Begin with these 4 options, every one of which have no fees: