Protect Yourself Before Your Federal Student Loan Service Changes
Earlier this month, the Department of Education released new details about the upcoming overhaul of the student loan support service. The department first announced these sweeping changes in a June press release, including its contracts with five new student loan organizations. The department, which has struggled with service accountability in the past , hopes to make a difference with the new, centralized NextGen platform. According to the press release, the five new companies will offer “enhanced customer support” to over 68 million borrowers.
However, according to the latest update, the five new companies will not take over immediately. The Department will continue to work with nine existing lending services; FedLoan Servicing, Great Lakes, Navient and Nelnet contracts do not expire until December 2021, while CornerStone, Granite State, Edfinancial, MOHELA and OSLA Servicing contracts are valid until March 2022.
“When it’s time to move your account to NextGen, you’ll receive emails, social media posts, and a host of other messages about what to expect and how to continue to manage your account,” wrote Mark Brown, Chief Operating Officer of Federal Aid …
Protect Yourself Before These Changes Happen
Although it may take more than a year to implement these changes, you must be prepared – changing student loan servicers can be a confusing process. In the past, changes to the student loan organization have caused lost payments, unexpected late fees, and problems with loan processing. Before the overhaul takes place, Adam S. Minsky – student loan attorney and senior contributor to Forbes – recommends taking steps to protect yourself.
Download a complete record of student loan payments from your current caregivers, as records may be lost when loans are transferred to new caregivers. You should also collect copies of any messages you have with your service providers, including emails and phone call notes. Also important: If you are on the road to government service loan forgiveness , take the time to validate your work .
After changing service personnel, double-check your bank accounts for correct payments. Don’t assume that your previous automatic payment schedule will remain the same. You should also keep an eye on your credit reports, which you now have free weekly access to, to make sure there are no errors related to the actions of your previous loan officer.