SAEDNEWS: Millions of federal student loan borrowers face upcoming servicer transfers, which can lead to lost payment history and credit report errors. Here’s how to protect your account and stay on track.
Federal student loan borrowers may soon see their loans moved to a new servicer as the U.S. Department of Education attempts to streamline operations and improve customer service. While the goal is efficiency, past transfers have sparked confusion, missed payments, and account errors.
The transfers will affect accounts like those in the Public Service Loan Forgiveness (PSLF) program, which may move from MOHELA to other servicers. Officials emphasize that the purpose is to make repayment easier. However, previous transfers have sometimes resulted in missing payment history, reporting delays, and temporary account confusion.
Experts warn that servicer changes can create issues such as:
Lost payment history, potentially slowing progress toward forgiveness programs.
Credit report errors, including duplicate or misclassified accounts.
Interrupted services, such as auto-pay cancellations or billing mistakes.
Confusion over repayment plans, especially income-driven or PSLF-related programs.
To minimize risks, borrowers should:
Save All Records: Keep duplicate payment receipts, statements, and communication from your current servicer.
Verify Your Account: Check your StudentAid.gov dashboard after the transfer to confirm your new servicer details.
Confirm Repayment Plan: Ensure your income-driven or forgiveness plan carries over correctly.
Re-Enroll in Auto-Pay: Automatic payments may not transfer, so set them up again with the new servicer.
Check Your Credit Report: Look for duplicates or incorrect balances and correct them immediately.
For borrowers already struggling with repayment, the transition can feel overwhelming. Being proactive can prevent minor administrative errors from turning into major setbacks. The Department of Education is monitoring transfers, but ultimately, borrower vigilance is key.
Student loan servicer changes are inevitable, but careful preparation can keep borrowers on track and prevent disruptions. Follow these steps to safeguard your loans and maintain progress toward forgiveness or repayment goals.
