Earlier this month, the Department of Education new details released about their upcoming reorganization of student loans. The dapartment announced these sweeping changes first in a June Press Release—Recorded it contracts with five new student loan servers.
The dapartment – that has difficulty with servicer accountability in the past – hoping to change things with a new, centralized NextGen platform. According to the press release, these five new companies will offer “improved customer support” to more than 68 million lenders.
The five new companies will not take it over immediately, though, according to the latest update. The dapartment will continue to work with its nine existing lenders; contracts with FedLoan Servicing, Great Lakes, Navient and Nelnet will not end until December 2021, meanwhile CornerStone, Granite State, Edfinancial, MOHELA and OSLA Servicing have until March 2022.
“When it’s time to move your account to the NextGen environment, you will receive emails, messages on social media and a wide variety of other communications about what to expect and how you can continue to manage your account, ‘wrote Mark Brown, the chief operating officer of Federal Aid.
Protect yourself before these changes happen
Although it may take a year before these changes are implemented, you need to be preparedSwitching student loan services can be a cumbersome process. In the past, have caused changes to student loan servers to lose payments, surprise late fees and issues for processing loans. Before the update happens, Adam S. Minsky – a student loan lawyer and senior Forbes cexplorer—recommends taking certain steps to protect yourself.
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Download a complete record of your student loan payments with your current lending services, such as records can be lost when transferring your loans to a new service. You should also collect copies of any communications you have with your servicers – including email and phone notes. Also important: If you are on the road for Forgiveness for public service, take the time certify your employment.
Once service changes occur, check your bank accounts for correct payments. Do not assume that your previous automatic payment schedule will remain intact. You should also review your credit reports – which you have now free weekly access– to ensure that there are no errors due to the actions of your previous loan server.
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