After taking out a federal student loan, it is impossible to select what servicer you want. While you can do this, you can change your federal student loan servicer if you consolidate your loan. If you are okay with your servicer, there is no need to change, but it may be a good idea to change if you are having difficulties with it. In any case, you need to change your servicer; it is advisable to know how to change your student loan servicer.
There are not many ways to change your loan servicer. If you do not know who your student loan servicer is, you can visit the StudentAid.gov website to find out. You can also contact every student loan servicer to identify which is for you. After getting a student loan, the U.S. Department of Education assigns you a loan servicer after your first loan disbursement. The servicer is then in charge of the collection and tracking of your loan payments.
There are several reasons why you may want to change your student loan servicer. Irrespective of your reason, this write-up contains the steps on how to change your student loan servicer.
3 Ways to Change Your Student Loan Servicer
As previously stated, there are not many ways to change your loan servicer. If you want to switch student loan servicers, here are the steps you can take. To transfer to a new student loan servicer, follow these steps.
Private Loan Refinancing
Refinancing your student loan is an option to consider if you want to switch to a new servicer. By refinancing your loan, you will be paying off your existing loan with a new private loan from a student loan refinancing company you select. However, depending on your credit, student loan refinancing may reduce your interest rates, which is one of the ways to save money on interest rates as well as pay off your bills quicker. In cases where you are wondering how your competitive loan works, make use of a loan score tool by entering your APR, monthly payment, credit score, and the amount left.
Federal Loan Consolidation
This is another way to change your student loan servicer. Consolidating your federal student loan to a direct consolidation loan can help you change your loan servicer. By doing this, your interest rates will remain the same, but you will be given an extended repayment term lasting up to 30 years, which reduces your monthly loan repayment. However, this may cause you to pay more interest throughout the loan repayment term. When consolidating your loan, you can change your loan servicer through the process.
Loan Forgiveness
If you work as a public servant or at a nonprofit organization and you have been making the right payments for ten years, you may qualify for federal student loan forgiveness through the PSLF program. Student borrowers who intend to pursue this program will have their loans transferred to the loan servicer handling their applications. Also, FedLoan Servicing can help manage your PSLF application until a certain period. However, after this, borrowers’ loans will then be transferred to MOHELA.
Why Should I Change My Student Loan Servicer?
One of the common reasons why borrowers change their loan servicers is poor customer service. Examples of these include trouble getting in touch with a representative or getting incorrect or unclear details about their loans. However, changing your servicer does not guarantee change for your complaints because every loan servicer has a similar performance. In cases where you continuously have poor experiences with your student loan servicer, consider consolidating or refinancing your student loan; getting a new loan servicer may not be the best thing to do.
Why Does My Student Loan Servicer Change?
If you have a federal student loan, your loan may be transferred by the Federal Student Aid to a new servicer. An email or letter will be sent to you before or after this action has been taken. Also, private student loan servicers may change when your loan is sold to a new servicer. But you will be informed about this action. After this change occurs, you may be required to set up your loan payment method again. If you had an automatic payment setting with your former lender, you may need to reset this with your new loan servicer.