There’s been a lot of news about student debt lately. And one of the biggest recent developments: the impending changes to federal student loan servicers.
Three major federal student loan servicers — FedLoan, Granite State, and Navient — are all in the process of ending their contracts with the Department of Education (DoEd) and transferring borrowers in their portfolios to new servicers.
If you’re one of the nearly sixteen million borrowers impacted by these changes, you should know that you don’t need to take any action to get a new servicer. At some point within the next year — and for most borrowers, before the end of 2021 — your old servicer and the DoEd will automatically assign you to a new loan servicer and transfer your debt.
But with federal student loan payment suspension just around the corner on January 31, it’s especially important that you stay on top of your servicer’s status so that you know how and where to make payments later this winter.
Here are four key steps you can take to get ready for the switch:
Know where you stand.
You probably haven’t given your federal student loans much thought since the payment freeze went into effect in March 2020 — so much so that you may not even remember crucial details like your total balance. Take this chance to log into your current loan servicer and save a copy of your loan details and payment history. This information should transfer to your new servicer automatically, but being able to cross-reference your own records could come in handy later on.
Make sure your contact info is up to date.
While you’re at it, make sure your contact info is up to date with both your current loan servicer and the FSA website. After all, 11 percent of Americans moved during the pandemic, and you don’t want to miss an important update because it was sent to the wrong address.
Get set up with your new servicer sooner rather than later.
Once you’re assigned to a new servicer, they’ll contact you with instructions for activating an account to access their online system. Take this step as soon as possible so you can set up monthly auto-pay, review the status of your loans, and confirm your personal details (which may include recertifying employment and income info if you’re enrolled in an income-driven repayment plan) before your next bill is due.
Make a plan for January 31st.
With so much commotion surrounding these student loan servicer changes, it’s easy to lose sight of the other major change that’s just around the corner for federal student loan borrowers. But the federal payment freeze is still set to end on January 31st, and it’s important to have a plan for how you’ll handle the return to repayment.
Not sure where to get started? The Milford Bank offers candid.ly as a value-added service to help you manage and repay your student loan debt faster and smarter. Whether you want to lower your monthly student loan bill, pay off your debt faster, or track your paydown progress, Candid.ly offers personalized tools that will move you closer to your goals. Visit milfordbank.com/other-services/candidly/ to learn more and activate your free account today.