How To Change Student Loan Servicer USA 2021
How To Change Student Loan Servicer?
Are you fed up with the poor student loan customer services? Well, don’t worry now you can even change student loan servicer without any hassle and faster. You cannot choose your student loan servicer like private money lenders. When your Federal student loan gets approved, you also get your student loan servicer selected by the Department of Education. There are no particular criteria for assigning the student loan servicer.
It is a good thing if everything is going smooth between you and your student loan servicer but many students face different problems at different stages of the loan all because of poor customer services. It is also the fact that you can’t get the first-class treatment like private money lenders to provide in a public sector office. Federal student loans are very much cheap in comparison to private sectors.
If you are not happy and dealing with unresolved loan issues for a very long time then you should change student loan servicer and get rid of your daily worries and focus on your studies. There are few ways to change student loan servicer, you can consolidate, apply for a public service loan forgiveness, and apply for total disability discharge.
If all the above methods don’t suit you and you want to change student loan servicer to a private sector then you can apply for refinancing of your federal loan and end all the communications once and for all.
Why Change Student Loan Servicer USA 2021?
CFPB or Consumer Financial Protection Bureau is the federal regulator who supervises and manages the whole student loan servicing and moneylender, partners. Form the year 2011, CFPB started the student loan grievances department to address and resolve the student loan issues. Students were not getting any information on their repayment plans and many faces issues regarding the payment handling and so on and all were asked to change student loan servicer.
CFPB receives more than 25000 complaints from student borrowers all over the nation regarding changing student loan servicer. Since then every year CFPB department receives thousands of grievances from the student regarding their loan servicers which leads to the investigation by the CFPB itself and the attorney general. Many lawsuits have been filed against several student loan servicer giants as borrowers face monetary and emotional harm while repaying their debts.
Therefore the option to change student loan servicer was introduced for those borrowers who are facing issues with their student loans at any stage. If you are also facing a similar issue then you can also change student loan servicer with various methods.
3 Methods To Change Student Loan Servicer USA 2021
There are mainly 3 ways to change student loan servicer. You can select the one which is suitable for your situation. all these methods are quite fast and easy. Let’s start:
- Direct Consolidation Of Your Loan
Consolidation of all your student loans is the best option to change student loan servicer. Consolidation means you can combine all your student loans and choose your new student loan servicer among the companies that manage the federal student loans. One must notice that you can only consolidate your all different federal student loans.
If your other student loans are from the private sector then you cannot consolidate them. Then you have to look for other means to change student loan servicer. The direct consolidation loan comes with many other advantages. Now instead of dealing with several student loans and remembering all the due dates, different repayment terms, and rate of interest. You only have to deal with one loan.
You didn’t just change student loan servicer but also having the option to choose new repayment terms. If you want you can opt for income-driven repayment terms which allows you to pay lower monthly installments. Your rate of interest might also change, you only have to pay the average interest rate of all the federal student loans. Another advantage is if any of your previous student loans have default then you can get them back into good standing by consolidation and improve your credit score.
- Apply For Public Student Loan Forgiveness
If you are working in a non-profit government organization or any other similar form where you are eligible for PSLF or Public Student Loan Forgiveness then you can change student loan servicer as well. PSLF program relieves students from making any further payment after 10 years of student loan repayment or 120 qualifying payments while working in a non-profit government organization.
There is one small hiccup, FedLoan Servicing is the only company that manages the PSLF student loan operations and if you are already with them and still facing the issue then you can’t use this method to change student loan servicer. If you are eligible for this plan submit your employment certificate to the Department of Education and once they verify your eligibility they will transfer your loan and you will be able to change your student loan servicer. Another fact is from now on you only have to pay the Income-driven payments for the specific period and then your student loan will get a discharge.
- Apply For Permanent Or Total Disability Discharge
This is not a method to change student loan servicer but is a forgiveness plan for people with total or permanent disability physical and mental both. Nelnet is the only student loan servicer who manages the application of total disability discharge. This forgiveness plan can only help the borrowers with a total disability who are unable to work to change student loan servicer and discharge their loan.
If you are in a similar state then you can apply for total disability discharge with the Department of Education and they will transfer your case to Nelnet, student loan servicer. They will examine your financial status and disability for the next 3 years on behalf of the federal government. If you don’t meet all the requirements then your student loan will get reinstated.
If none of the above options is suitable for you and don’t meet your requirement to change student loan servicer then there are two other ways to change student loan servicer.
- Refinance Student Loan
Many students refinance their federal student loans from a private lender which helps them to change student loan servicer and you can get many other benefits. You can vet your options according to your need and all your loans will be managed by a bank or an online lender. You will get excellent customer services, transparent repayment terms, lower student loan interest rates, and so on. Refinancing federal student loans could be the one solution for many problems.
- Transferred By The Department Of Education
It is only dumb sheer luck. Sometimes the Department of Education transfers the student loan case from one company to another for various internal reasons which are not related to you. If you are lucky then this could happen to you over the life of your loan. In that case, you will receive a notification from your old and new student loan servicer. If you were looking to change student loan servicer then this could be the best thing that happens to you and I not then just pray your new loan servicer is a good company.