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Your Student Loan Servicer Changed: What Now?

With three federal student loan services leaving the servicing industry, here’s what to know about changing your student loan servicer.

Angela Brown Angela Brown Edited by Ashley Harrison Updated April 5, 2022

Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. By refinancing your mortgage, total finance charges may be higher over the life of the loan.
Credible Operations, Inc. NMLS # 1681276, is referred to here as "Credible."

In some cases, the Department of Education will transfer federal student loans from one servicer to another — for example, if a loan servicer will no longer manage federal loans, or if you sign up for a program like Public Service Loan Forgiveness (PSLF).

In this situation, the Department of Education will notify you by mail or email (or both) that your federal loans are being transferred. The notice will include your new servicer’s name and contact information. If this happens, it’s a good idea to check the National Student Loan Data System (NSLDS) to verify the servicer for each of your federal student loans.

Here’s what you should know about student loan servicer changes and how they work:

  • Which student loan servicers are changing?
  • How can I change my student loan servicer?
  • Student loan consolidation vs. refinancing
  • Should I refinance my student loan?

Which student loan servicers are changing?

Loan servicers might choose to transfer their loans or leave the servicing industry entirely in some cases. For example, if they can’t make enough money through loan servicing or have contractual disagreements, a servicer might opt to not renew their contract with the Department of Education.

Tip: If you’ve received notice that your federal student loans will be transferred, be sure to continue making payments as usual while your account is established with your new servicer.

While servicers don’t tend to leave the industry often, three servicers have announced that they won’t be renewing their contracts with the Department of Education, including:

Navient

  • Federal servicing ended: Dec. 31, 2021
  • New servicer: Aidvantage

In September 2021, Navient asked the Department of Education to transfer the federal loans it services to Maximus, another servicer. This was largely due to the financial and political turmoil caused by the pause placed on federal student loan payments and interest accrual due to the COVID-19 pandemic.

While the Department initially renewed Navient’s contract through December 2023, it ended up approving Navient’s request in October 2021. Maximus — operating under the name Aidvantage — took over Navient’s contract and began servicing loans in December 2021.

Next steps: If your loans were transferred from Navient to Aidvantage, visit the Aidvantage website for more information.

Also keep in mind that Navient will continue to service federal loans made under the Federal Family Education Loan (FFEL) program as well as private student loans.

Granite State Management and Resources

  • Federal servicing ended: Dec. 31, 2021
  • New servicer: Edfinancial Services

In July 2021, Granite State Management and Resources announced that it would allow its servicing contract with the Department of Education to expire in December 2021. As with Navient, Granite State’s decision was the result of financial losses due to the postponement of federal student loan payments and interest accrual by the CARES Act.

The federal student loans that Granite State serviced were transferred to Edfinancial, another servicer. Rather than servicing federal loans, Granite State will focus its resources on EdvestinU, its private student loan arm.

Next steps: If your federal loans were transferred to Edfinancial, visit Edfinancial’s website for more information.

FedLoan Servicing

  • Federal servicing ends: December 2022
  • New servicer: Aidvantage, Edfinancial, MOHELA, or Nelnet

In July 2021, FedLoan Servicing announced that it would not be renewing its contract with the Department of Education in December 2021 and would instead “focus on its core public service mission in Pennsylvania.” However, FedLoan later agreed to a one-year extension of its contract to allow for a smooth transition, meaning that it will exit the servicing industry in December 2022.

Like Navient and Granite State, FedLoan’s decision appears to be largely based on the financial consequences to servicers from the CARES Act pause. FedLoan’s portfolio will be transferred to Aidvantage, Edfinancial, the Higher Education Loan Authority of the State of Missouri (MOHELA), or Nelnet.

Next steps: If your loans have been transferred to one of the servicers listed above, you can find more information by visiting their websites here:

  • Aidvantage
  • Edfinancial
  • MOHELA
  • Nelnet

Also keep in mind that FedLoan Servicing has managed the PSLF program and Teacher Education Assistance for College and Higher Education (TEACH) Grant Program. All borrowers enrolled in PSLF as well as TEACH Grant recipients will have their loans transferred to MOHELA.

Learn More: How to Use the National Student Loan Data System (NSLDS)

How can I change my student loan servicer?

When you take out a federal student loan, you don’t have a choice of federal student loan servicer — instead, the Department of Education assigns your loan to one of the servicers.

However, if you’re unhappy with your federal loan servicer, here are a few other options to change your student loan servicer:

Private refinancing

One way to change your loan servicer is to refinance your student loans. Through refinancing, you’ll pay off your old loans with a new private loan with the student loan refinance company of your choice.

Depending on your credit, refinancing might get you a lower interest rate — which could save you money on interest and potentially help you pay off your loans faster.

Keep in mind: While you can refinance both federal and private loans, refinancing federal student loans will cost you access to federal benefits and protections — such as income-driven repayment plans and student loan forgiveness programs.

If you’re wondering how competitive your loan is, the loan score tool below can help. Just enter your APR, credit score, monthly payment, and remaining balance (estimates are fine) to see how your loan stacks up.

Loading widget - loan-score-tool

Federal consolidation

Another option is to consolidate your federal loans into a Direct Consolidation Loan. While this won’t lower your interest rate, it will let you extend your repayment term up to 30 years, which could significantly reduce your monthly payments — though this also means you’ll pay more in interest over time.

Additionally, you can select your servicer when you apply for consolidation.

Loan forgiveness

If you work for a government or nonprofit organization and make qualifying payments for 10 years, you could qualify to have your federal loans forgiven through the PSLF program.

Borrowers who decide to pursue PSLF will have their loans transferred to the servicer handling PSLF applications. FedLoan Servicing will manage PSLF applications until December 2022. After this, existing borrowers will have their loans transferred to MOHELA.

Check Out: How to Find Your Student Loan Balance

Student loan consolidation vs. refinancing

While the terms consolidation and refinancing are often used interchangeably, they mean different things for private and federal student loans.

  • Federal student loan consolidation is the process of consolidating federal loans into a Direct Consolidation Loan. Unlike private refinancing, this won’t lower your interest rate, but it will let you extend your repayment term up to 30 years to reduce your monthly payments — though remember that this also means you’ll pay more in interest charges overall. Additionally, consolidating into a new federal loan means you won’t lose your federal benefits.
  • Private student loan refinancing (also known as private student loan consolidation) is the process of paying off your old loans with a new private student loan. This leaves you with just one loan and payment to manage. You might also qualify for a lower interest rate through refinancing, depending on your credit. However, keep in mind that refinancing federal student loans will cost you access to federal protections.
 Federal student loan consolidationPrivate student loan refinancing
Are federal loans eligible?YesYes
Are private loans eligible?NoYes
Will it combine all my loans into one?YesYes
Will I get a lower interest rate?NoPossibly
(depending on your credit)
Is a credit check required?NoYes
Will I keep my federal benefits?YesNo

Should I refinance my student loan?

Refinancing your student loans could be a good idea in some cases, but it isn’t right for everyone. Here are some pros and cons to keep in mind as you weigh your options:

Pros

  • Could lower your interest rate: Depending on your credit, refinancing might get you a lower interest rate, which could save you hundreds or even thousands of dollars on interest charges.
  • Might reduce your monthly payments: If you opt to extend your repayment term, you could lower your monthly payments and lessen the strain on your budget. Just remember that you’ll pay more in interest over time with a longer term.
  • Combine multiple loans: Keeping track of multiple loans with different rates and payments can be difficult. Refinancing allows you to combine them into one new loan, leaving you with just one payment to manage.

Cons

  • Loss of federal benefits: If you refinance federal student loans, you’ll lose access to federal benefits and protections.
  • No loan forgiveness: Unfortunately, private student loan forgiveness doesn’t exist.
  • Could be hard to qualify if you don’t have good credit: You’ll typically need good to excellent credit (or a cosigner) to get approved for refinancing — a good credit score is usually considered to be 700 or higher. This means you might have a hard time qualifying if you have less-than-stellar credit.

You can use our calculator below to see how much you can save by refinancing your student loans.

Step 1. Enter your loan balance

? Enter the remaining amount of the loans you’d like to refinance $

Step 2. Enter current loan information

? Enter the average annual interest rate of the loans you’d like to refinance %
? Enter the monthly amount you currently pay on your loans (or enter remaining term) $
? Enter the amount of time left to repay your loan (or enter monthly payment) years

Step 3. Enter your new loan information to start calculating your savings

? Enter an estimated new interest rate. %
? Enter the monthly amount to pay on your new loan (or enter new loan term) $
? Enter the amount of time you have to repay your loan (or enter monthly payment) years
Lifetime Savings Increased Lifetime Cost $
New Monthly Payment $
Monthly Savings Increased Monthly Cost $

If you refinance your student loan at % interest rate, you can save will pay an additional $ monthly and pay off your loan by . The total cost of the new loan will be $.


Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.

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About the author
Angela Brown
Angela Brown

Angela Brown is a student loan, personal finance, and real estate authority and a contributor to Credible. Her work has appeared in Fox Business, LendingTree, FinanceBuzz, and Yahoo Finance.

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