Nelnet And Great Lakes Won’t Service Your Federal Student Loans
If Nelnet or even Great Lakes service your federal student loans, you might get a whole new student loan servicer.
Here is what you need to know.
nelnet and Great Lakes, which are a component of the same company and together service federal student loans for around 13 million student loan borrowers, could very well no longer service federal pupil loans after December 2020. The surprise announcement comes as the U.S. Department of Education, led by Education Secretary Betsy DeVos, seeks to boost student loan servicing. What’s a pupil loan servicer? When you pay out federal student loans, you do not spend the federal government or maybe Department of Education directly. Rather, you pay your student loan servicer, which collects your student loan payments and provides customer care.
This is another major step toward our commitment to improving customer service and holding the contractors of ours responsible for their performance, DeVos said. Students, parents, borrowers, along with schools deserve a world class encounter when addressing [Federal Student Aid], and I am confident that FSA has employed 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 greater than $120 billion of financial aid to greater than 68 million pupils across 5,800 postsecondary institutions every year – contracts which are signed with five student loan servicers to service federal student loans and give enhanced customer support:
Edfinancial Services LLC
F.H. Cann & Associates LLC
MAXIMUS Federal Services Inc.
Missouri Higher Education Loan Authority (MOHELA)
Texas Guaranteed Pupil Loan Corporation (Trellis Company)
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What to Know About Your Pupil Loan Servicer
DeVos would like to streamline as well as simplify student loan repayment. Underneath DeVos’ new strategy, you might begin making student loan payments by way of a centralized platform, studentaid.gov, instead of through the individual pupil loan servicer sites. DeVos believes the present student loan servicing system lacks consistency and accountability, which hurts student loan borrowers.
Nelnet: We’re shocked We’re shocked that the two highest rated servicers as well as the dedicated employees who are accountable for getting those rankings won’t looked into by the Department for this contract, Nelnet CEO Jeff Noordhoek said. We’re frustrated and disappointed by this choice and the lack of transparency in the process and often will pursue every legitimate avenue available to make sure that students have the good quality service they’ve come to expect from us.
In June 2009, the Education Department awarded Nelnet student loan servicing contracts. As of March 31, 2020, Nelnet was servicing $185.5 billion of student loans for 5.5 million borrowers below the contract of its, and Lakes that are Great was servicing $243.2 billion of student 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 fourteen, 2021. Separately, Nelnet services $48.7 billion in FFELP, private training as well as customer loans for 2.1 million borrowers that aren’t influenced by the Education Department’s decision.
What you must do next
When Nelnet or Great Lakes service your federal student loans:
Always keep making your regular monthly student loan payments to Nelnet or Great Lakes.
You don’t have to apply for the latest pupil loan servicer.
The Education Department will assign you a brand new pupil loan servicer and often will get in touch with you in advance of any transition.
After you’re informed of your new pupil loan servicer, you’ll be able to begin sending pupil loan payments to your new student loan servicer.
As soon as that happens, be sure to update auto payments.
How to pay off pupil loans faster If you’ve pupil loans, make sure to use a game plan. What is the easiest way to pay off student loans quicker? Start with these four options, all of which have no fees: