Nelnet And Great Lakes Will no longer Service Your Federal Student Loans
If Nelnet or even Great Lakes service your federal student loans, you may get a whole new student loan servicer.
Here’s what you need to understand.
Student Loans
nelnet and Great Lakes, which are part of the very same business and together service federal student loans for around 13 million student loan borrowers, could 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 pupil loan servicing. What is a pupil loan servicer? When you pay out federal student loans, you do not spend the federal government or perhaps Department of Education directly. Instead, you pay your student loan servicer, which collects the student loan payments of yours and supplies customer service.
This is another major step toward our commitment to improving customer support and holding our contractors accountable for their performance, DeVos said. Students, parents, borrowers, and schools deserve a world class encounter when dealing with [Federal Student Aid], and I am confident that FSA has employed the organizations with the know how, experience and expertise to give that.
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What Happened
On June twenty four, the Department of Education announced that Federal Student Aid – which provides greater than $120 billion of financial aid to greater than sixty eight million pupils across 5,800 postsecondary institutions per year – contracts which are signed with 5 student loan servicers to service federal pupil loans and deliver 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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DeVos wishes to streamline and simplify student loan repayment. Under DeVos’ brand new plan, you could begin making pupil loan payments through a centralized platform, studentaid.gov, instead of through the unique student loan servicer websites. DeVos feels the present student loan servicing structure lacks accountability and consistency, which hurts pupil loan borrowers.
Nelnet: We’re surprised We are shocked that the two highest rated servicers and also the dedicated personnel that are liable for getting those rankings will not looked into by the Department for this agreement, Nelnet CEO Jeff Noordhoek said. We are frustrated and disappointed by this selection and the absence of transparency in the process and can pursue every legal avenue available to ensure that pupils have the premium quality service they’ve come to expect from us.
In June 2009, the Education Department awarded Nelnet student loan servicing contracts. As of March thirty one, 2020, Nelnet was servicing $185.5 billion of pupil loans for 5.5 million borrowers below its contract, and Great Lakes 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 14, 2021. Separately, Nelnet services $48.7 billion in FFELP, private schooling as well as customer loans for 2.1 million borrowers which are not impacted by the Education Department’s decision.
What you must do next
When Nelnet or Great Lakes service your federal student loans:
Don’t panic.
Keep making your regular monthly student loan payments to Nelnet or perhaps Great Lakes.
You do not need to use for the latest pupil loan servicer.
The Education Department will assign you a brand new student loan servicer and will get in touch with you in advance of any transition.
After you’re informed of your brand new student loan servicer, you can begin sending student loan payments to your new pupil loan servicer.
As soon as that happens, make sure to update car payments.
How you can pay off pupil loans more rapidly If you’ve student loans, make sure to have a game plan. What is the best way to pay off pupil loans quicker? Start with these 4 options, each one of which have no fees:
