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When you take out a federal student loan, the U.S. Department of Education originates it, but then passes on the duties of servicing the loan to a third party. Unfortunately, this can make things confusing once you graduate and need to start making payments or have questions about your loans.
If you're wondering who services your federal student loans and how to handle multiple loans with different servicers, here's what you need to know.
How Do I Find Out Who Services My Student Loans?
A student loan servicer acts as a middleman between you and your lender, which is the federal government in the case of federal student loans.
When you apply for federal loans, they'll be automatically assigned to a servicer by the Federal Student Aid office—and, unfortunately, you don't have a choice in the matter. It's even possible to have different loans assigned to different servicers.
Federal loan servicers include:
- CornerStone
- Default Resolution Group/Maximus Federal Services Inc.
- ECSI
- FedLoan Servicing (PHEAA)
- Granite State Management & Resources
- Great Lakes Educational Loan Services Inc.
- HESC/Edfinancial
- MOHELA
- Navient
- Nelnet
- OSLA Servicing
If you're not sure who your loan servicer is for a particular loan, you can sign in to your federal student aid dashboard or call the Federal Student Aid Information Center at 800-433-3243 to find out and to get the servicer's contact information.
Keep in mind that if you are still in school and need information about your loan's status or disbursement date for the current school year, you'll deal directly with your school's financial aid office. However, if the loan you want to inquire about is from a past year, you'll contact your servicer if you need to:
- Inform them that your full-time enrollment status is changing
- Update your contact information
- Inquire about loan repayment options
- Request help with making your loan payment
- Have other questions about your student loan(s)
Can I Change My Student Loan Servicer?
If you're having trouble with your current servicer or you have multiple servicers for different loans, it is possible to make a switch to a new one. Here's how:
- Consolidate your federal loans. When you apply for a direct consolidation loan, you can replace one or more of your student loans with a new one. During the process, you'll have the option to choose your new servicer, giving you some control over who you work with. Keep in mind, though, that when you consolidate federal loans through this program, your new interest rate may be slightly higher than your current weighted-average rate across all your loans.
- Apply for Public Service Loan Forgiveness. FedLoan Servicing is the only federal loan servicer that manages the Public Service Loan Forgiveness (PSLF) program. So if you're working toward obtaining forgiveness for your federal loans through PSLF, applying will automatically change your servicer to FedLoan.
- Refinance your loans with a private lender. Refinancing your student loans allows you to replace both your servicer and lender (the federal government) with a private lender. Depending on your credit history and income situation, it could also potentially help you get a lower interest rate and monthly payment. Keep in mind, though, that better loan terms aren't guaranteed, and refinancing will cause you to lose certain federal benefits, such as access to loan forgiveness programs and income-driven repayment plans.
How to Manage Student Loans With Multiple Servicers
In some cases, some of your federal student loans could be assigned to different loan servicers.
This arrangement can make your life complicated because each servicer may have separate due dates, and you'd need to contact each one individually if you want to request forbearance, deferment or a different repayment plan.
If you're in this situation, consolidating or refinancing your loans with a different servicer or lender could simplify things. But if you'd prefer to avoid higher interest rates or fewer loan benefits, here are some ways to manage all of your loans:
- Set up automatic payments. Trying to keep track of all of your monthly payments manually can be a pain. While it's important to know your due dates to ensure you have enough money in your bank account to cover them, getting on an autopay plan can make your life a little easier. Also, note that you'll get a 0.25% interest rate reduction on direct federal loans if you sign up for autopay.
- Keep a list of your servicers' contact information. If you need to ask a question about your loans, make additional payments or submit a request, have the contact information for each of your servicers on hand, and make a note of which loans each company services so you don't accidentally leave any out.
- Call before making extra payments. Each loan servicer may be a little different in how they apply payments. So if you want to pay off your loans early or make additional principal-only payments, call first to make sure they know how to apply your payment and which loan you want to target.
How Student Loans Impact Your Credit
If you have federal student loans, it's crucial to know who your servicer is, especially if you have more than one, because a misstep could damage your credit.
Missing a payment for 30 days or more or defaulting on a loan could have a significant negative impact on your credit score. Simplifying things by consolidating or refinancing your loan can help, but it may not be necessary as long as you know exactly where all of your loans are.
As you work on paying down your student loans, monitor your credit regularly to ensure that your credit is in good shape. If you notice a dip in your credit score, check your credit report to get an idea of which areas you need to address to bring it back up.
Over time, building your credit history through student loans and other forms of credit can help improve your financial situation and make it easier to gain access to affordable financing in the future when you need it.