Nelnet And Great Lakes Won’t Service Your Federal Pupil Loans
When Nelnet or perhaps Great Lakes service your federal student loans, you may get a brand new pupil loan servicer.
Here is what you have to understand.
nelnet and Great Lakes, which are actually a part of the very same business and collectively service federal student loans for around thirteen million pupil loan borrowers, might not 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 improve student loan servicing. What’s a pupil loan servicer? When you spend federal student loans, you don’t pay the federal government or Department of Education directly. Instead, you pay your student loan servicer, which collects the student loan payments of yours and supplies customer service.
This’s another major step toward the dedication of ours to improving customer service and holding our contractors accountable for the performance of theirs, DeVos said. Pupils, parents, borrowers, and schools deserve a world class encounter when managing [Federal Pupil Aid], and I’m confident that FSA has employed the businesses with the expertise, expertise and experience to deliver that.
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On June 24, the Department of Education announced that Federal Student Aid – which provides greater than $120 billion of financial aid to more than 68 million pupils across 5,800 postsecondary institutions each year – signed contracts with 5 student loan servicers to service federal pupil loans as well as 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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What you should Know About Your Student Loan Servicer
DeVos would like to streamline as well as simplify pupil loan repayment. Under DeVos’ new strategy, you could begin making student loan payments via a centralized platform, studentaid.gov, instead of through the individual pupil loan servicer sites. DeVos feels the present student loan servicing system lacks consistency and accountability, which hurts student loan borrowers.
Nelnet: We are surprised We are surprised that the two highest rated servicers as well as the committed personnel who are responsible for getting those rankings won’t be considered by the Department for this contract, Nelnet CEO Jeff Noordhoek said. We are frustrated as well as disappointed by this choice and the lack of transparency in the process and often will engage in every legal avenue available to make sure that students have the high 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 below its contract, 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 fourteen, 2020 with two optional six-month extensions through December fourteen, 2021. Individually, Nelnet services $48.7 billion in FFELP, private education and customer loans for 2.1 million borrowers that aren’t influenced by the Education Department’s decision.
The thing you need to do next
If Nelnet or Great Lakes service your federal pupil loans:
Do not panic.
Keep making your regular monthly pupil loan payments to Great Lakes or Nelnet.
You don’t need to apply for a brand new pupil loan servicer.
The Education Department is going to assign you a new pupil loan servicer and often will speak with you in advance of any transition.
As soon as you’re informed of your brand new student loan servicer, you can start driving student loan payments to your new pupil loan servicer.
Once that happens, ensure to update car payments.
How you can pay off pupil loans more quickly If you have pupil loans, ensure to have a game plan. What is the simplest way to pay off pupil loans quicker? Begin with these four options, all of which have no fees: