Nelnet And Great Lakes Will no longer Service Your Federal Student Loans
If Nelnet or perhaps Great Lakes service your federal student loans, you might get a new pupil loan servicer.
Here’s what you need to understand.
Pupil Loans
Great Lakes and nelnet, which are a component of the same company and collectively service federal pupil loans for around thirteen 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 pupil loan servicer? If you pay out federal student loans, you don’t spend the federal government or Department of Education directly. Rather, you pay your student loan servicer, which collects your student loan payments and provides customer service.
This’s another key step toward our dedication to improving customer care and holding our contractors accountable for the performance of theirs, DeVos said. Students, parents, borrowers, as well as schools deserve a world class encounter when dealing with [Federal Student Aid], and I’m confident that FSA has hired the businesses with the know how, experience and expertise to provide that.
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What Happened
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 annually – contracts that are signed with 5 pupil loan servicers to service federal student loans and also provide enhanced customer support:
Edfinancial Services LLC
F.H. Cann & Associates LLC
MAXIMUS Federal Services Inc.
Missouri Higher Education Loan Authority (MOHELA)
Texas Guaranteed Student Loan Corporation (Trellis Company)
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DeVos wishes to streamline as well as simplify pupil loan repayment. Under DeVos’ brand new strategy, you may start making pupil loan payments by way of a centralized platform, studentaid.gov, as opposed to through the individual pupil loan servicer websites. DeVos thinks the present student loan servicing system lacks accountability and consistency, which hurts pupil loan borrowers.
Nelnet: We’re surprised We are shocked that the two highest rated servicers and also the dedicated personnel that are responsible for achieving those rankings won’t be looked at by the Department due to this agreement, Nelnet CEO Jeff Noordhoek said. We are frustrated as well as disappointed by the lack and this decision of transparency in the task and will pursue every legitimate avenue available to ensure that pupils have the premium quality service they’ve come to expect from us.
In June 2009, the Education Department awarded Nelnet student loan servicing contracts. As of March thirty one, 2020, Nelnet was servicing $185.5 billion of student loans for 5.5 million borrowers below its contract, and Great Lakes was servicing $243.2 billion of pupil loans for 7.3 million borrowers under its contract. These servicing contracts expire on December 14, 2020 with two optional six month extensions through December fourteen, 2021. Separately, Nelnet services $48.7 billion in FFELP, private training as well as customer loans for 2.1 million borrowers which aren’t influenced by the Education Department’s decision.
The thing you need to do next
If Nelnet or even Great Lakes service your federal pupil loans:
Do not panic.
Keep making your regular monthly student loan payments to Great Lakes or perhaps Nelnet.
You do not need to apply for a new pupil loan servicer.
The Education Department will assign you a new student loan servicer and will get in touch with you in advance of any transition.
After you’re informed of your brand new student loan servicer, you’ll be able to begin sending student loan payments to your new student loan servicer.
Once that happens, ensure to update car payments.
How to pay off pupil loans more rapidly If you’ve pupil loans, ensure to use a game plan. What’s the best way to pay off pupil loans quicker? Begin with these four options, every one of which have no fees:
