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How to Switch Student Loan Servicers

When you take out a federal student loan, you don’t get a say in who ends up being your loan servicer. The Department of Education chooses loan servicers for all federal student loan borrowers.

Although none of the current federal student loan servicers are perfect, some have better reputations than others, when it comes to student loan repayment and other customer service issues. If your loan servicer is leaving a bad taste in your mouth, you might be wondering if you can switch to a new servicer.

The short answer: yes, you can switch servicers.

There are only three ways to initiate loan servicer changes, which include consolidating your loans, signing up for Public Service Loan Forgiveness (PSLF), or refinancing your loans through a private lender. Keep reading to learn more about how to switch your student loan servicer.

How to change student loan servicers through consolidation

The primary way to switch your loan servicer is by consolidating your loans into a Direct Consolidation Loan. This type of loan allows borrowers to combine several federal loans into one loan. The new loan comes with a fixed interest rate that’s based on the weighted average of consolidated loans’ rates. Here are the steps to consolidate your student loans.

1. Apply for loan consolidation

The transfer process starts by filling out the Federal Direct Consolidation Loan Application and Promissory Note at StudentLoans.gov. You can apply online or print a paper application and mail it to the desired student loan servicer. Have personal and loan information ready when you sit down to fill out the application.

2. Choose your new loan servicer

During the application process, there’s an option to select a new loan servicer. Make your selection, completely fill out the rest of the application, and then submit it.

Current federal student loan servicers include:

  • ECSI
  • FedLoan Servicing (PHEAA)
  • Granite State
  • Great Lakes Educational Loan Services
  • HESC / EdFinancial Services
  • Missouri Higher Education Loan Authority (MOHELA)
  • Navient
  • Nelnet
  • OSLA

3. Continue making loan payments

Make student loan payments through your original loan servicer until your application is approved. Once this happens, you’ll be contacted by your new loan servicer with details on your new loan payment and any other instructions you should know about.

Consolidating your student loans is a good choice if you have several federal loans under different loan servicers. You can consolidate eligible loans into one loan with one monthly payment under one servicer of your choice.

If you’re not sure who your student loan servicer is, you can log into your Federal Student Aid account select “View loan servicer details” under the “My Aid” section. You can also call the Federal Student Aid Information Center at 1-800-433-3243 to find out.

Changing loan servicers through PSLF

If you’ve decided to pursue PSLF, there’s a good chance that your loan servicer will change.

PSLF is a federal loan forgiveness program that forgives Direct Loan balances tax-free after making 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

Fedloan Servicing is the official loan servicer of the PSLF program. After you apply for PSLF, your loans will automatically transfer to Fedloan Servicing from your previous loan servicer. However, this could change in the coming future. FedLoan Servicing indicated in July 2021 that it didn’t want to extend its contract with the Department of Education beyond December 2021. The PSLF program will still exist, but there’s no word yet about who will take over servicing PSLF payments going forward. Tracking PSLF payments could likely get messy during the transition. This shows the need and reality to prepare for changes in your student loan servicer, as student loan borrowers will likely deal with more than one servicer in their repayment journey.

Changing loan servicers through student loan refinancing

Depending on your situation, the best option to change your loan servicer could be to refinance your student loans. When you refinance your student loan, a private lender pays off your old lender and issues you a new loan with a new interest rate and loan terms.

Qualifying for refinancing depends on your credit score and history, income, and other determining factors. If you have established credit, you could qualify for much lower interest rates than your current loan. A low interest rate can potentially save you thousands of dollars over the life of your loan. Refinancing also allows you to lower your monthly payments, although this could lead to paying more for your loan in the long run.

Although student loan refinancing has obvious financial advantages, there are also drawbacks. When you refinance federal student loans, they become private loans. You’ll lose access to several protections provided by the federal government. These protections include income-driven repayment plans, loan deferment and forbearance, and loan forgiveness programs like PSLF.

A refinanced federal student loan can’t switch back to a federal loan. Make sure you have a stable income and emergency savings built up before you refinance so you can make your monthly payments.

Why borrowers might consider changing loan servicers

There are several legitimate reasons why borrowers might want to switch to another loan servicer. Possible reasons include:

  • Poor customer service
  • Confusing website
  • Mishandling of loan payments
  • Incorrect loan account information
  • Lack of communication
  • You want to consolidate your loans
  • You want to pursue PSLF

Switching to a new loan servicer may not solve the problem, but it’s an option if you are unhappy with your current situation. We’ve ranked all federal loan servicers based on complaints received by the Consumer Financial Protection Bureau (CFPB).

Should you change student loan servicers?

Take time to research before leaping to a new student loan servicer. Switching to a different loan servicer isn’t always the answer, and there’s no guarantee that a new loan servicer will provide better service than your current one.

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