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 a number of 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
Why 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 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 so as 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
Learn more about student loan servicers
Different Methods to change your student loan servicer
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 actually 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.
2.Change your loan servicer by opting for PSLF (Public Service Loan Forgiveness)
If you work in a government or non-profit organizations 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 Fedloan 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.
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 student and then breathe a sigh of relief by taking a trip or etc.