U.S. Secretary of Education Miguel Cardona (Photo by Joshua Roberts/Getty Images)
Student loan forgiveness gets a new student loan servicer.
Here’s what you need to know.
Student Loans
There have been multiple updates to your student loans in recent weeks. This includes a major announcement about the postponement of student loan payments until May 1, 2022 as well as a major announcement about student loan forgiveness. As President Joe Biden reshapes student loans, another update regarding your student loan servicer is worth noting. Let’s explore. (The Education Department will cancel $2 billion of student loans within weeks).
Student loan forgiveness: new student loan servicer
If you’re pursuing public service loan forgiveness, it’s important to understand who your student loan servicer will be. Your student loan servicer is the company to whom you send your monthly student loan payments and who you contact for customer service. The Public Service Loan Forgiveness program is a federal program created in 2007 that helps student loan borrowers who work for a qualified public service or non-profit employer to get full federal student loan forgiveness if they meet multiple requirements. Historically, FedLoan Servicing (also known as PHEAA) has been the student loan servicer for the Public Service Loan Forgiveness program. However, the U.S. Department of Education has announced that MOHELA will become the new student loan servicer for the Public Service Loan Forgiveness program. This means that if you are pursuing public service loan forgiveness, you will no longer make student loan payments to FedLoan Servicing and instead will make your monthly student loan payments to MOHELA. (How to qualify for automatic student loan forgiveness).
1. Who is my current student loan servicer?
If you are enrolled in public service loan forgiveness, then FedLoan Servicing has been your student loan servicer. If you’re not pursuing public service loan forgiveness, then you may have a different student loan servicer for your private and federal student loans. Who is your student loan servicer? To find your federal student loan servicer, log in to your Federal Student Aid (FSA) account. You can also contact Federal Student Aid at 1-800-4-FED-AID (1-800-433-3243). For your private student loan servicer, check your monthly student loan statements.
2. Will my student loan servicer change?
If you are enrolled in public service loan forgiveness, then your student loan servicer will change to MOHELA. The U.S. Department of Education will notify you in writing if your student loan servicer will changes. Even though federal student loan payments have been postponed for a fifth time, the Education Department is still transitioning student loan borrowers to a new student loan servicer rather than waiting until May. (Biden extended student loan relief, but advocates really want student loan cancellation). For example, if your federal student loans were serviced by Navient, FedLoan, Granite State or CornerStone, for example, then you will get a new student loan servicer as these companies announced they will be exiting federal student loan servicing. For FedLoan Servicing, for example, the Education Department is transferring your federal student loans to MOHELA, Aidvantage, Edfinancing and Nelnet
3. What steps should you take with your student loans?
You don’t have to make any changes to your student loans if you get a new student loan servicer. Getting a new student loan servicer won’t change your loan terms or interest rate. Federal student loans have fixed interest rates, meaning they won’t change over the life of your student loans whether you keep or change your student loan servicer. You should keep making student loan payments to your current student loan servicer until you are notified whether to make payments to a different servicer. If your student loan servicer changes, make sure to update your autopay information so you don’t miss any student loan payments.(Here’s how to get student loan forgiveness during the Biden administration).
Student loans: next steps
What are next steps for your student loans? For your student loan servicer, you don’t have to take any immediate action. The Education Department will contact your if you’re impacted. If you’re focused on public service student loan forgiveness, then you now know that your student loan servicer will change. It’s also possible you may be one of 16 million student loan borrowers who will also get a new student loan servicer this year. Importantly, while federal student loan payments currently are paused, student loan relief won’t last forever. Make sure you understand all your options now for student loan repayment. Here are some smart ways to pay off student loans and save money: