If you had federal student loans, you’ve likely experienced a change: Your loans have been transferred to a new servicer. This transition can be confusing! We have this guide to help you understand how are your FedLoan New Servicer.
Who Are the New Student Loan Servicers?
Former FedLoan borrowers have been assigned to one of the following student loan servicers:
- MOHELA: MOHELA is a Missouri-based servicer already established in the federal student loan space.
- Edfinancial: Edfinancial is a Tennessee-based servicer with a long history in student loan management.
- Aidvantage: Aidvantage primarily manages loans for institutions of higher education, and is the servicing arm of Navient, a former major federal servicer.
- Nelnet: Nelnet, based in Nebraska, is another well-established federal student loan servicer.
How Does the Transition Affect Me?
Here’s what you need to know about the transition from FedLoan Servicing to your new servicer:
- Changes in Repayment: Your loan terms (interest rates, repayment plans, etc.) remain unchanged by the servicer transition.
- New Account Access: You’ll need to create a new account with your assigned loan servicer and set up online access and automatic payments.
- Communication is Key: Expect official communication from your new servicer with details about the transition, including account access instructions.
What Should Borrowers Expect During the Transition?
If your loans are being transferred from FedLoan to a new servicer, here’s a general timeline of what to expect:
- About 15 days before the transfer, you’ll receive an initial notice (email and/or letter) from FedLoan announcing the transfer. This notice will include your new servicer’s name and contact information.
- Around the effective transfer date, you may notice your FedLoan account is cleared, with the balance showing as “paid in full.” This does not mean your loans are forgiven – it’s just part of the transfer process.
- About 10 days after the effective transfer date, you’ll receive a welcome notice from your new servicer confirming the transfer is complete. This notice will provide instructions for making payments and managing your account with the new servicer.
- Your loan details will likely be available on your new servicer’s website within a few days of receiving the welcome notice. You’ll need to set up an online account with the new servicer if you haven’t already.
- Start making payments to your new servicer by the due date provided in your welcome notice. If you were previously enrolled in autopay with FedLoan, you may need to re-enroll with your new servicer.
The key is to carefully read all communications from FedLoan, your new servicer, and the Department of Education to ensure you understand the transfer process and what actions you need to take. Payments or applications that were in process before the transition should transfer seamlessly, but it’s a good idea to double-check that everything is accurate on your new account.
FAQs
Q: Will my monthly payment amount change?
A: Your monthly payment should remain the same unless you’ve changed repayment plans or your income information for Income-Driven Repayment has been updated.
Q: Do I need to reapply for Public Service Loan Forgiveness (PSLF)?
A: No, your progress towards PSLF should have been transferred along with your loans. However, double-check your eligibility status with your new servicer, especially if MOHELA is now handling your loans.
Q: Will my interest rate increase?
A: No, your interest rates are tied to your federal student loans and won’t change during a service transfer.
Conclusion
After the transfer is done, check your loan details and account status with the new servicer.. Get in the habit of logging into your account regularly to check for messages and make sure your payments are being processed correctly.
By keeping track of the MyFedLoan service and collaborating with the new loan servicer, you will never have to face disruptions in your student loan repayment and will be able to remain on the right track toward your financial goals.