Student Loans: Can Borrowers Change Their Servicers?

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If you don’t like your student loans servicer, can I switch to another creditor?

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Lenders can consider these options if available there are issues with their student loan issuance.

Reasons Not to Like Your Student Loans

There are many reasons why a borrower may feel uncomfortable with their loan offer. Over the past few years, there have been changes among student loans.

In 2021, Fortune reported Navient passed on his business to Maximus, a federal contracting company. This means that a new student loan service was effective immediately for Navient lenders, which may have caused confusion in the transition.

Apart from the confusion of changes, borrowers may sometimes struggle if the company providing the loans does not provide good service, makes wrong decisions or defaults on their loans. Borrowers who do not feel that their service provider is providing the services they promised may look for another option.

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Can you change your student loan servicer?

Lenders with student loans, even if they are unhappy with their current company, cannot initiate a transfer to another. service

Liz Canini, senior vice president of personal and student loans at PNC Bank, said lenders enter into contracts with servicers to service their student loans. Each contract is assigned to the loan originator or bank.

A borrower can change borrowers for a private student loan by refinancing the loan to another lender. However, Canini said that refinancing through another loan is not a guarantee that the same service will not be affected.

What if the borrower has federal student loans? If these loans are held by a private lender, Canini said they can refinance to another lender or consolidate their loans into a Federal Direct Consolidation Loan. Borrowers with federally held federal student loans are advised to contact the Department of Education for information about available options. are available to them.

Changes for Changing Student Loan Service Providers

What are some options to explore if you’re unhappy with your lender and can’t switch? Check these things out.

Consider refinancing loans

Angela Colatriano, chief marketing officer at College Takes Students, recommend looking into refinancing your student loans. This is usually a good option for borrowers who have a lot of student loans and need help making payments.

“Beyond changing the service, you may be able to lower your monthly payments, lock in a fixed rate or save the entire cost of the loan – and in some cases all of the above,” the Colatriano said.

Colatriano advises federal student loan borrowers to think carefully before refinancing the debt with a private student loan.

“Right now, you’re benefiting from the reimbursement assistance from the CARES Act,” Colatriano said. “Federal student loans also offer unique benefits, such as income-based repayment plans and federal loan forgiveness, that private lenders do not offer.”

Contact the Service directly

“If student loan borrowers have a problem with their service, we recommend that they contact the service directly,” Canini said.

According to Canini, students are often dissatisfied with their service due to factors outside of the lender’s control, such as program requirements. If the issue is related to something else, borrowers should contact the lender who holds the loan. The borrower can participate in helping to find a solution for the issue.

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This article originally appeared on Student Loans: Can Borrowers Change Their Servicers?

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