Nelnet And Great Lakes Won’t Service Your Federal Pupil Loans
If Nelnet or Great Lakes service your federal student loans, you may get a brand new pupil loan servicer.
Here is what you need to know.
Great Lakes and nelnet, which are actually part of the same business and together service federal student loans for approximately 13 million student loan borrowers, could not 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 improve student loan servicing. What is a student loan servicer? If you spend federal student loans, you do not pay the federal government or Department of Education directly. Rather, you pay the student loan servicer of yours, which collects your student loan payments and supplies customer support.
This’s another major step toward the commitment of ours to improving customer care and holding the contractors of ours accountable for the performance of theirs, DeVos said. Pupils, parents, borrowers, as well as schools deserve a world-class encounter when managing [Federal Pupil Aid], and I’m confident that FSA has hired the businesses with the expertise, expertise and experience to provide that.
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On June 24, the Department of Education announced that Federal Pupil Aid – which provides greater than $120 billion of financial aid to greater than 68 million students across 5,800 postsecondary institutions each year – signed contracts with 5 pupil loan servicers to service federal pupil loans and provide enhanced consumer support:
Edfinancial Services LLC
F.H. Cann & Associates LLC
MAXIMUS Federal Services Inc.
Missouri Higher Education Loan Authority (MOHELA)
Texas Guaranteed Pupil Loan Corporation (Trellis Company)
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What to Know About Your Pupil Loan Servicer
DeVos would like to streamline as well as simplify pupil loan repayment. Underneath DeVos’ brand new strategy, you may start making student loan payments via a centralized platform, studentaid.gov, as opposed to through the individual pupil loan servicer websites. DeVos thinks the present pupil loan servicing system lacks consistency and accountability, which hurts pupil loan borrowers.
Nelnet: We’re surprised We are shocked that the two highest rated servicers and also the dedicated employees who are liable for obtaining those rankings will not be considered by the Department because of this contract, Nelnet CEO Jeff Noordhoek said. We are frustrated as well as disappointed by this decision and the absence of transparency in the process and can engage in every legal avenue readily available to ensure that pupils have the high quality service they have come to expect from us.
In June 2009, the Education Department awarded Nelnet pupil loan servicing contracts. As of March thirty one, 2020, Nelnet was servicing $185.5 billion of student loans for 5.5 million borrowers under its contract, and Lakes which are Great was servicing $243.2 billion of pupil loans for 7.3 million borrowers under its agreement. These servicing contracts expire on December 14, 2020 with 2 optional six-month extensions through December 14, 2021. Separately, Nelnet services $48.7 billion in FFELP, private training and consumer loans for 2.1 million borrowers that are not influenced by the Education Department’s decision.
What you need to do next
When Nelnet or even Great Lakes service your federal pupil loans:
Do not panic.
Keep making your regular monthly student loan payments to Nelnet or even Great Lakes.
You don’t need to use for a brand new student loan servicer.
The Education Department will assign you a new pupil loan servicer and will get in touch with you in advance of any transition.
As soon as you’re informed of your brand new pupil loan servicer, you can start sending student loan payments to your new pupil loan servicer.
Once that happens, ensure to update car payments.
How to pay off student loans more rapidly If you’ve student loans, ensure to use a game plan. What’s the easiest way to pay off student loans quicker? Begin with these 4 options, every one of which have no fees: