Personal finance

When student loan payments restart, many borrowers may have a different servicer

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If you have an outstanding federal student loan, you may have a different servicer when payments resume in October.

Several of the lenders that managed the debt for the government — including Navient, the Pennsylvania Higher Education Assistance Agency (also known as FedLoan) and Granite State — stopped doing so during the pandemic-era pause of more than three years on the bills.

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As many as 4 in 10 student loan borrowers will be transferred to a different company by the fall, according to the Consumer Financial Protection Bureau.

Here’s what to know.

Look out for notices about the change

Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers, said impacted borrowers should get emails about the change. These notices will explain the steps they’ll need to take, Buchanan said.

Higher education expert Mark Kantrowitz has been tracking the transfers.

Borrowers previously with FedLoan should be transferred to MOHELA, or the Missouri Higher Education Loan Authority, he said.

Those who were serviced by Granite State will now be with EdFinancial Services. Accounts with Great Lakes Higher Education, Kantrowitz said, should be managed by Nelnet going forward.

And Navient’s borrowers will be moved to Maximus Federal Services/Aidvantage.

You can check to see if you have a new servicer at StudentAid.gov., Kantrowitz said.

Prepare for glitches

Borrowers shouldn’t have to do much during the servicer swap, Buchanan said.

Some will need to create an updated online account with their new company. “But the communications they received would have told them if they needed to take that step,” he added.

If you were enrolled in automatic payments with your servicer, which usually leads to a small discount on your interest rate, you may need to reenroll, Kantrowitz said.

You’ll also want to make sure your new servicer has your latest contact information, he said, as these details might have changed during the Covid pandemic.

Also, Kantrowitz said, “whenever there is a change of loan servicer, there can be problems transferring borrower data.”

“Borrowers should be prepared for the possibility of glitches,” he added.

Payments due in roughly two months

The pause on federal student loan payments is slated to finally conclude in October.

Your due date should be at least 21 days after you are sent a loan statement, Kantrowitz said.

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