Student loans are a great option to tackle the rise in college tuition costs. When you borrow loans from the government the loans you get are federal student loans. They come with several benefits and advantages that come in handy while repaying your student loan debt.
There are ways for you to change your student loan servicer. The Department of Education assigns servicers to collect loans from the students. But it does not allow the students to choose the servicer of your choice. If you are one of those students and want to change your servicer, then this article is for you.
Table of Contents
- Different Methods to switch your federal loan servicers
- Reasons you may want to switch your servicer
6 Ways to switch your federal student loan servicers
Here are the different methods in which you can change your student loan servicer:
1.Consolidation your loan amount to change your student loan servicer
Well, this is pretty much the only option for many of the people. By consolidating your student loans, you combine all of your existing student loans into one new, single, and direct loan. It can also be an excellent strategic option as you can extend your term and lower your monthly payment amount. It also makes it easier for you to manage all the loans at once. It switches your servicer from one to another also, thereby achieving what you started for.
You can find an application form for a student loan consolidation on the Federal Student aid website. You can also find the full student loan servicers list below:
FedLoan Servicing (PHEAA)
Great Lakes Educational Loan Services, Inc.
OSLA Student Loan Servicing
Granite State — GSM&R
On the website, you can enter the details of all your loans and choose a repayment plan for the consolidated loan amount and proceed as per your requirement. You can pick your desired servicer at the end of the process.
Federal Student Loans Guide helps you understand the various key factors before you make any decision regarding your student loans. The application process and eligibility criteria can save a good deal of your time. Knowing the types of suitable loans can help you take advantage of the relief program each offers you in times of crisis. Choosing the right repayment options will help you make an informed decision to manage your expenses in the future.
Looking for student loans? Find the best student loans for you.
2. Change your loan servicer by opting for PSLF (Public Service Loan Forgiveness)
If you work in a government or non-profit organization you can opt for the Public Service Loan Forgiveness program. This can trigger a change in the company that manages your loans.
But there are certain conditions. You need to make sure that you have made 120 consecutive payments or 10 years worth of loan payments to be eligible for tax-free forgiveness or else your forgiven amount will be taxed as income for you.
Another catch is that the only servicer that processes student loan forgiveness is FedLoan Servicing. Once you submit an Employment Certification Form and the Department of Education verifies your employment, your loans will be transferred to Fed loan servicing. You should also have made payments on an income-driven plan to save money. But if Fedloan servicing is already your student loan servicer then it makes no sense to apply for PSLF just for the sake of switching your loan servicer.
3.Refinancing your student loans
Refinancing your student loans can be a good option if you are looking to change your loan servicer and go for a private loan lender. Refinancing your student loans can help you if you are stuck with an existing difficult student loan. It can help you change your student loan terms and help you get a good interest rate and an affordable monthly payment. Although there are a lot of companies to refinance your student loans with, find the most suitable and the best companies to refinance your student loans.
We won’t be listing the loan canceling for permanent and total disability because it is neither a strategy to change your servicer nor can be used by everyone who has student loans. However, if you are a war veteran who suffered a permanent disability or if you receive Social Security Disability Insurance(SSDI) or Supplemental Security Income(SSI), or even if your doctor certifies that you are disabled. And all the disability discharge applications are handled by Nelnet.
Sometimes if you are in luck, your loan might be transferred to another servicer by the Department of Education itself. In case that happens, you will be notified by the old servicer and the new one and you can start paying your new servicer.
So you can switch your student loan servicer by using the above methods. If your loan is about to be closed in a few years, you can bear your servicer for a little more time and pay off all your students and then breathe a sigh of relief by taking a trip, etc.
4. Ed transfers your loans to a new servicer
On rare occasions, your loans can be transferred by the ED, from one service to another. Once your loans are transferred, your payments are made to the new servicer and you will be notified the same.
5.Refinancing your loans with a private lender
As we know that federal loans always come with better protection benefits, it may not be a wise decision to give up your protection benefits. Still, if you choose to do so, you can refinance your loans with the private loan provider. Be mindful to keep a track of the best interest rates and benefits provided by the lenders before you make a decision.
6.In cases of Total Disability Discharge
If you qualify for Total Disability Discharge, chances are you may not owe any payments towards your loans or if you have a different provider and wish to switch. You can apply for Total Disability Discharge and switch to NELNET as they are the only servicer managing applications for Disability Discharge.
Learn more about student loan servicers
The reason you might want to change your student loan servicer?
Having negative experiences with the student loan is a common occurrence as the servicers usually take you for granted. They can put your calls on hold or mislead you with information that will force you to make decisions that might not be optimal for your situations and profitable for them. Or you may want to have complete control in choosing your servicer or may want to pay your loans faster or go into the Student Loan Forgiveness Program.
When this happens switching servicers may be the good and sometimes the only option for you.
But before you can switch your servicer here are a few things that you can figure out for yourself to make yourself ready for all the servicer switching process:
Make sure of what you want in the servicer
Get to know all your Loan’s technical terms properly(like interest rates, term, principle, etc).
Make sure you do comprehensive market research of different loan servicers
Get the best options for your loan
Though there are just a few ways to switch your servicers, you can take advantage of the methods mentioned to change your loan servicer. Weigh all the pros and cons. And be aware of the benefits you may have to sacrifice if you refinance your loans with the private loan lenders. You do not have to always continue with the servicer whose assistance is not satisfactory.