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"Changing Servicers: What Borrowers Can Expect When Student Loan Payments Resume"

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Preparing for Servicer Changes as Student Loan Payments Resume

Notices and Transfers

Scott Buchanan, the executive director of the Student Loan Servicing Alliance, assures impacted borrowers that they will receive emails regarding the upcoming changes in loan servicers. These notices will provide detailed instructions on the necessary steps borrowers need to take. Higher education expert Mark Kantrowitz has been closely monitoring the transfers of loan accounts.

Specific Servicer Transitions

Borrowers who were previously serviced by FedLoan will be transferred to MOHELA (Missouri Higher Education Loan Authority), according to Kantrowitz. For those previously serviced by Granite State, their accounts will now be managed by EdFinancial Services. Great Lakes Higher Education accounts are expected to be handled by Nelnet moving forward. Navient's borrowers will see their accounts moved to Maximus Federal Services/Aidvantage.

Checking Servicer Information

To determine if they have a new servicer, borrowers can visit StudentAid.gov, as recommended by Kantrowitz. It is crucial to stay informed about any changes and updates regarding loan servicers.

Minimal Action Required

Buchanan assures borrowers that the transition between servicers should require minimal effort on their part. While some may need to create updated online accounts with their new loan servicing company, the communications they receive will clearly indicate if this step is necessary.

Considerations for Automatic Payments and Contact Information

For borrowers enrolled in automatic payments, which often come with a small interest rate discount, Kantrowitz advises reenrollment with the new servicer. Additionally, borrowers should ensure that their new servicer has their latest contact information, as personal details may have changed during the Covid-19 pandemic.

Possible Glitches and Data Transfer

Kantrowitz warns that when there is a change of loan servicer, there can sometimes be challenges in transferring borrower data. Borrowers should be prepared for the possibility of glitches during the transition period.

Resuming Loan Payments

The pause on federal student loan payments is scheduled to conclude in October. Kantrowitz advises borrowers to expect their due date to be at least 21 days after receiving a loan statement. In conclusion, as student loan payments resume, borrowers should stay informed about the changes in loan servicers and follow the instructions provided in the notices. While the transition process should be straightforward, it is essential to reenroll in automatic payments if applicable and ensure that contact information is up to date. By being prepared for potential data transfer issues, borrowers can navigate the resumption of loan payments smoothly.

The Impact on New Businesses

The resumption of student loan payments and the subsequent changes in loan servicers could have a significant impact on new businesses, particularly those in the financial sector.

Opportunities for Financial Services

For new businesses offering financial services or financial technology solutions, this transition period could present an opportunity. These companies could provide tools or services to help borrowers manage their loans, track changes in servicers, and navigate any potential glitches in data transfer.
Increased Demand for Financial Counseling
Furthermore, there could be an increased demand for financial counseling services. Borrowers may seek advice on how to manage their loan payments, especially if they are dealing with changes in loan servicers. New businesses in this sector could step in to fill this need, offering guidance and support to borrowers during this transition period. In conclusion, while the resumption of student loan payments and the changes in loan servicers may present challenges for borrowers, it could also create opportunities for new businesses. By offering innovative solutions and support, these businesses could help borrowers navigate the transition smoothly, while also establishing a strong presence in the market.
Story First Published at: https://www.cnbc.com/2023/08/21/many-student-loan-borrowers-may-have-a-different-servicer-in-october.html
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