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Nelnet And Great Lakes Won’t Service Your Federal Pupil Loans

If Nelnet or Great Lakes service the federal student loans of yours, you may get a whole new student loan servicer.

Here’s what you need to understand.

Student Loans
Great Lakes and nelnet, which are a part of the very same company and collectively service federal student loans for around 13 million pupil loan borrowers, could very well 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 boost student loan servicing. What’s a student loan servicer? When you spend federal student loans, you do not spend the federal government or Department of Education directly. Instead, you pay your student loan servicer, which collects the student loan payments of yours and provides customer care.

This’s another key step toward our dedication to improving customer care and holding the contractors of ours accountable for their performance, DeVos said. Pupils, parents, borrowers, along with schools deserve a world-class encounter when managing [Federal Student Aid], and I am confident that FSA has employed the businesses with the knowledge, expertise and experience to provide that.

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What Happened
On June 24, the Department of Education announced that Federal Pupil Aid – which provides more than $120 billion of financial aid to greater than 68 million students across 5,800 postsecondary institutions yearly – contracts which are signed with five student loan servicers to service federal pupil 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 would like to streamline as well as simplify student loan repayment. Under DeVos’ new strategy, you could begin making pupil loan payments via a centralized platform, studentaid.gov, rather than through the individual student loan servicer sites. DeVos believes the current pupil loan servicing system lacks consistency and accountability, which hurts student loan borrowers.

Nelnet: We’re surprised We are surprised that the 2 highest rated servicers and also the committed personnel that are liable for obtaining those rankings won’t looked into by the Department due to this agreement, Nelnet CEO Jeff Noordhoek said. We’re frustrated and disappointed by this selection and the absence of transparency in the task and often will pursue every legitimate avenue available to make sure 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 31, 2020, Nelnet was servicing $185.5 billion of student loans for 5.5 million borrowers under the contract of its, and Lakes that are Great was servicing $243.2 billion of student loans for 7.3 million borrowers under its contract. These servicing contracts expire on December 14, 2020 with 2 optional six-month extensions through December 14, 2021. Individually, Nelnet services $48.7 billion in FFELP, private education as well as customer loans for 2.1 million borrowers which aren’t impacted by the Education Department’s decision.

The thing you must do next
If Nelnet or even Great Lakes service your federal pupil loans:

Don’t panic.
Always keep making your regular monthly pupil loan payments to Great Lakes or even Nelnet.
You don’t need to use for a brand new pupil loan servicer.
The Education Department is going to assign you a brand new pupil loan servicer and can speak with you in advance of any transition.
As soon as you are informed of your new student loan servicer, you can start sending pupil loan payments to your new pupil loan servicer.
Once that happens, make sure to update auto payments.
How you can pay off student loans more rapidly If you have student loans, be sure to use a game plan. What is the best way to pay off pupil loans faster? Start with these 4 options, each one of which have no fees:

 

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