Federal student loan servicing is not handled by the fed itself. The Department of Education contracts loan servicers to manage repayment and other services for federal student loans. You have had to deal with a federal student loan servicer if you used federal student loans to fund college. Understanding the role of your loan servicer and your rights as a borrower is important to make sure you are in control of your federal student loans.
The FFELP was terminated by the Obama administration. The William D. Ford Federal Direct Loan Program is administered by the U.S. Department of Education. The Department of Education disburses all student loan funds through its Direct Loan program. Thousands of students have access to the financial aid they need to pursue their educational goals thanks to this program. Student loans are handled by various organizations after they have been funded. The resources provided by these organizations help borrowers manage their debt.
These loan servicers are organizations that handle payments, refinancing, customer service, and anything else you may need. Who are these organizations? There are many unanswered questions about these organizations. Is one better than the rest? It’s important to consider all of the options before making a decision, as it’s possible that one is better than the other.
How Many Student Loan Servicers Are There?
Here is the current list of federal student loan servicers:
- CornerStone
- FedLoan Servicing (PHEAA)
- Granite State – GSMR
- Great Lakes Educational Loan Services is a subsidiary of Great Lakes Educational Loan Services, Inc. The company helps students and families secure financing for college.
- HESC/Edfinancial
- MOHELA
- Navient
- Nelnet
- OSLA Servicing
There have been many changes over the years. Some of the changes are due to advances in technology, while others are due to changing tastes. American Education Services is not on the list. It’s important to check with your lender to see if AES handles your loan. As of the end of the FFELP program in 2010, the AES are no longer servicing new federal student loans. All new federal student loans issued since 2010 are serviced by the Department of Education.
Other changes have taken place. Great Lakes is one of the largest servicers according to the Department of Education. More services will be provided to student loan borrowers as a result of this acquisition.
Not-for-Profit Servicers
It’s also worth noting that five of the above servicers are not-for-profits:
- CornerStone
- GSMR
- HESC
- MOHELA
- OSLA
FedLoan is actually for-profit, even though its parent organization is a not-for-profit. FedLoan makes money from the services they provide.
As of June 2019, if we add up all outstanding loan data from the “Servicer Portfolio by Loan Status” spreadsheet, we can see that not-for-profits hold a tiny fraction of total outstanding debt – just over 9%. There are four for-profit servicers, but there are five not-for-profits. These not-for-profit servicers have been in the student loan space for a long time.
Servicer | Total Outstanding Debt ($billions) |
PHEAA (FedLoan, AES) | $315.7 |
Great Lakes | $209.8 |
Nelnet | $158.4 |
Navient | $193.3 |
Not-for-Profit Servicers | $88.7 |
You would be correct in your assessment if you think that the majority of student loan debt is in a relatively small number of hands. A recent report found that 10% of borrowers have student loan debt.
How Do I Find Out Who My Student Loan Servicer Is?
The quickest and easiest way to find out who your student loan servicer is would be to visit the National Student Loan Data System (NSLDS). When you apply for federal student aid, you need to create an FSA ID to log into the system. You will be able to log into the system whenever you need to, once you have created your FSA ID.
There is a form to create an FSA ID if you have never done so before. Once the form has been completed, you will be able to log in to your account and access federal student aid information. You can’t create one for someone else, and you should only create one for yourself. Your FSA ID is only valid for your own use, savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay savesay
As a note, it is common for student loans to change hands (more on that below). If you have up-to-date contact information, you will only be notified if that happens with your student loans. If your student loan lender has accurate contact information, you will be notified of any changes to your student loan payments. You could get a new servicer if you don’t keep it up to date. It’s a good idea to check in with your servicer every now and then to make sure you stay on track.
Can I Change My Student Loan Servicer?
There is no way to change your federal student loan servicer. If a new servicer is necessary, you must contact your current servicer to discuss options. You can’t just log in and say you want to change your servicer. To change your loan servicer, you must first contact your current servicer. The only way to change your servicer is to refinance with a private lender.
Refinancing with a Private Lender
Refinancing with a private lender will allow them to buy out your remaining student loan balance and issue a new student loan on their own terms. You should proceed with caution because you may give up some valuable protections. It is important to do your research and consider all of the options before making a decision.
Despite the issues with federal student loan servicers, the loans themselves come with protections that private lenders may not offer.
Some private student loan lenders will cancel your debt in the unfortunate event of your death, but not all of them. It is important to research the specific terms of your loan agreement to determine what protections you have in the event of a death. If your student debt ever gets canceled, it will be because of federal student loans.
Loans Can Be Sold To Other Servicers
If your loans are sold, your servicer may change. The terms and conditions of your loan may change if your loan is sold. It’s a common occurrence in the student loan industry for loans to change hands. This can happen when a lender sells the loan to another lender or when a loan is transferred from one servicer to another. The loans are sold between servicers. Increased access to capital for borrowers can be achieved through this process.
You don’t have control over the process as a borrower. It’s important to research ahead of time to make sure you get the best deal. Many borrowers are included in these sales, not just yours.
Which Federal Student Loan Servicer is the Best?
It is difficult to say who the best federal student loan servicer is. It is important to research and consider your own needs before making a decision about a servicer. You can’t request a new student loan servicer. If you choose to refinance, you may be able to consolidate your loans with a new servicer.
It is not possible for borrowers to compare the different loan servicers.
Servicer | Total Complaints | Total Borrowers (Millions) | Borrowers per Complaint |
PHEAA (FedLoan, AES) | 10,222 | 6.85 | 670 |
Great Lakes | 1,532 | 6.71 | 4,380 |
Nelnet | 3,389 | 5.14 | 1,517 |
Navient | 30,976 | 5.4 | 174 |
Not-for-Profit Servicers | 885 | 5.41 | 6,112 |
Federal Student Aid doesn’t give data for not-for-profit student loan servicers. You should check with the institution that issued the loan to find out who is servicing it. We only have the totals for all not-for-profit servicers, which is what you see above.
Not-for-profits tend to have fewer complaints than for-profit student loan servicers in the CFPB’s Complaint Database. OSLA has only 45 complaints. OSLA has the most positive reviews of any servicer in the industry, making it an ideal choice for customers.
Over 30,000 complaints have been received by Navient. Customer service, loan servicing issues, and other topics are just some of the topics that are covered in the complaints. They have the smallest portfolio of for-profit federal student loan servicers. They have had to face more scrutiny from the government.
Out of the not-for-profits, MOHELA has the most complaints. MOHELA is considered to be one of the best organizations of its kind despite the amount of complaints.
Comparing The Number of Borrowers per Complaint
The data shows that not-for-profit servicers fare the best. Not-for-profit servicers are the most efficient when it comes to customer service. The number of borrowers for which there is one complaint is the better number. The better the lender’s track record of customer satisfaction, the higher the number.
For not-for-profits, one out of every 6,112 borrowers raises a complaint. Not-for-profits have a good track record of providing quality service. Out of every 174 borrowers, one raises a complaint. In order to provide the best customer service experience possible, Navient is committed to addressing any issues or concerns quickly and effectively. That is quite different. There are significant differences between the two options.
This makes not-for-profits look better. When it comes to potential donors looking for an organization to support, this is especially true. Great Lakes has one of every 4,380 borrowers raising a complaint with the CFPB. Customer satisfaction with Great Lakes is lower than average.
Great Lakes was acquired by Nelnet. Customers of both Great Lakes and Nelnet can now benefit from a wider selection of services. It is difficult to be optimistic that this will make Great Lakes better. We are hopeful that our efforts will have a positive impact. Time will tell how that acquisition will play out. It will be interesting to see how this partnership will affect the industry in the future.
Out of the not-for-profits, MOHELA has the most complaints. Communication issues, billing errors, and more are some of the complaints.
Not-for-profits seem to fare the best, but Great Lakes is not far behind. As the competition increases, it will be interesting to see how Great Lakes fares.
How Do I Contact My Federal Loan Servicer?
Customer service may be handled differently by the federal student loan servicer. It is important to understand how your servicer handles customer service before contacting them. The table below shows all of their phone numbers and links to their website. If you need help with anything, be sure to reach out to any of these contacts.
Servicer | Phone | Contact Hours (EST) |
American Education Services (AES) | 1-800-233-0557 | Mon-Fri, 8:30 a.m. to 9:00 p.m. |
CornerStone | 1-800-663-1662 | Mon-Thurs, 8:00 a.m. to 9:00 p.m. Friday, 8:00 a.m. to 7:00 p.m. |
FedLoan | 1-800-699-2908 | Mon-Fri, 8:00 a.m. to 9:00 p.m. TEACH Grant support: Mon-Fri, 8:00 a.m. to 9:00 p.m. |
Granite State | 1-888-556-0022 | Mon-Fri, 8:00 a.m. to 6:00 p.m. |
Great Lakes | Mon-Fri, 8:00 a.m. to 10:00 p.m | |
HESC/Edfinancial | 1-855-337-6884 | Mon-Thurs, 8:00 a.m. to 8:30 p.m. Friday, 8:000 a.m. to 6:00 p.m. |
MOHELA | 1-888-866-4352 | Mon-Thurs, 8:00 a.m. to 10 p.m. Friday, 8:00 a.m. to 6:00 p.m. |
Navient | 1-800-722-1300 | Mon-Thurs, 8:00 a.m. to 9:00 p.m. Friday, 8:00 a.m. to 8:00 p.m. |
Nelnet | 1-888-486-4722 | Mon-Fri, 8:00 a.m. to 10:00 p.m. |
OSLA | 1-866-264-9762 | Mon-Fri, 9:00 a.m. to 6:00 p.m. |
What You Should Know About Federal Student Loan Servicing
It is not easy to determine which federal student loan servicer is the best. It is necessary to further research the different student loan servicers. OSLA has the lowest number of complaints, but we don’t know their total number of borrowers. If you look at the full scope of OSLA’s lending records, you can draw conclusions about their performance.
Great Lakes appears to have the best track record of the servicers. Only one servicer has maintained a consistently high level of customer satisfaction ratings. Great Lakes was acquired by Nelnet.
Despite not knowing how many borrowers they have, not-for-profit servicers seem to be rated better.
If your student loans are sold to a different servicer, you cannot change your servicer. It’s important to know who your servicer is and to contact them if you have any questions about your loan.
Refinancing with a private lender may mean giving up federal student loan protections, so it’s important to explore repayment options first. Before making a decision, it is important to evaluate the benefits and risks.