Federal Student Loan Servicers: Your Guide to Repayment and Assistance

Updated on June 27, 2023

Discover the role of federal student loan servicers in managing and guiding your loan repayment journey. Learn how to find your servicer, navigate repayment plans, access loan forgiveness programs, and make the most of their services.

Who is My Student Loan Servicer?

A federal student loan servicer acts as an intermediary between you and the federal government, providing you with the funds for your college education. Developing a relationship with your servicer is crucial in eliminating your student loans.

Student loan servicers collect your loan payments and monitor their timely repayment. They also assist borrowers in switching repayment plans, certifying eligibility for forgiveness programs, and enrolling in loan payment deferment options.

It is important to note that although servicers are tasked with helping you maintain good standing with your loans by providing support and resources, they are private companies. This means they may present choices that do not align with your best interests. Therefore, it is essential to become your advocate by familiarizing yourself with your repayment options and asking pertinent questions.

^{More: Revised REPAYE Plan to Ease Student Loan Debt Burden}

To find out who your federal student loan servicer is, you can log in to My Federal Student Aid if your loan payments have not yet commenced or you are unsure about your servicer. You must create an FSA ID to access the portal, where you can view loan details, apply for a direct consolidation loan, or enroll in an income-driven repayment plan.

^{More: How Income-Driven Repayment Plans Can Help You Manage Your Student Loan Payments}

Knowing the name of your student loan servicer and feeling comfortable contacting the company are crucial initial steps toward taking control of your loans. You can reach out to all loan servicer contact centers by calling 1-800-4-FED-AID.

While all services offer similar assistance and services, you might consider changing your servicer if you encounter difficulties with your current one. There are limited ways to achieve this, so determining your goal will help you choose the most suitable option.

What do federal student loan servicers do?

Collect and track your payments: Servicers manage student loans on behalf of the federal government and private lenders. Even though you may have a federal student loan, you will work with a private company to repay it. Creating an account on your servicer’s website promptly after receiving your first loan disbursement is crucial. This enables you to track the amount borrowed and the interest accumulated during school. You can also use your online account to pay off accrued interest before it capitalizes or is added to your total balance at the end of the student loan grace period. Six months after you leave school, you will receive your first bill. Setting up automatic monthly payments can help prevent falling behind on your loans but ensure you have sufficient funds in your bank account each month to cover the cost.
Assist with repayment plans: By default, your servicer will place you on the 10-year standard student loan repayment plan unless you select an alternative plan during your exit counseling session when leaving school. The standard plan divides your balance into 120 fixed payments. However, this may be challenging to afford if you have significant debt. Student loan servicers can help determine if you qualify for one of the government’s income-driven repayment plans, which limit your payments to a percentage of your income. You can use the government’s student loan repayment estimator tool to assess the amount you would pay under an income-driven plan. If you decide to switch plans, your servicer will process your application and handle annual income recertification, a requirement to remain eligible.
Customize your loan payments: Once your income allows you to make additional payments towards your loans, you may want to prioritize paying off certain loans first, such as those with higher interest rates, to save money in the long run. Making payments beyond the scheduled amount will reduce your overall balance and the interest paid over time. Communicate with your servicer through phone, email, or written instructions to ensure that any extra funds are applied correctly. Otherwise, they may be allocated to your next month’s bill.
Process deferment or forbearance requests: If you encounter periods during your repayment term where you cannot afford your loan payments, it is important to promptly inform your loan servicer. They can assist you in applying for deferment or forbearance, which temporarily postpone your payments during times of financial difficulty. As a response to the pandemic, the federal government made all student loans eligible for interest-free forbearance in March 2020. This measure has been extended multiple times since then. Stay informed about when student loan payments will resume.
Help with loan forgiveness certification: If you work in certain fields for a specific period, you may qualify for student loan forgiveness. To ensure you are on track to receive this benefit, your servicer can guide you in determining the eligibility of your loans, whether you are on a qualifying repayment plan, and whether you have completed the necessary certification forms. Applying for a loan forgiveness program may require a change in servicers. For example, if you apply for the Public Service Loan Forgiveness program, MOHELA will become your servicer. This program forgives the remaining loan balance after 120 payments while working for a nonprofit or government organization. If MOHELA does not service your loans, they will be transferred once you begin the certification process. It is essential to learn more about forgiveness programs and the application process.
Servicing changes and the future: Efforts are being made to streamline the student loan servicing landscape. In April 2023, the Department of Education announced new contracts with five student loan servicers: Maximus Education (also known as Aidvantage), Edfinancial, MOHELA, Nelnet, and Central Research, Inc. Legacy contracts will be extended until December 2024 to ensure a smooth transition.

^{More: Student Loan Forbearance Extension: What You Need to Know}

A longer-term project involves the creation of a centralized online student loan servicer portal accessible to all federal student loan borrowers through the StudentAid.gov website, regardless of their servicer. This change aims to minimize disruptions caused by account transfers and enhance servicer accountability. However, the implementation of this portal will take several years.

Recent servicer portfolio transfers have also occurred. GSMR’s loans were transferred to Edfinancial, while Navient’s loans were transferred to Aidvantage, the servicing arm of Maximus. FedLoan Servicing ceased servicing all loans as of December 14, 2022, with loans transferred to MOHELA, Edfinancial, Aidvantage, or Nelnet. Great Lakes is in the process of transferring its portfolio to Nelnet.

^{Learn More: Managing Student Loan Debt: Understanding Your Options}

Before servicing contracts end, borrowers should download and save their payment history, update their contact information, and be prepared to manage payments with the new servicer. Although servicers offer similar options and programs, customer service may vary.

To learn more about each federal loan servicer, including their services and contact information, it is recommended to explore additional resources available.