The US Department of Education did some loan servicing restructuring and Nelnet and Great Lakes weren’t a part of it. As of December, of last year, the Department of Education severed ties with the two servicing companies, but borrowers seem to be paying the price.

Who is Servicing the Loans?

According to the Department of Education, the five servicers they’ve contracted with moving forward include:

  • Edfinancial Services LLC
  • F.H. Cann & Associates LLC
  • MAXMUS Federal Services Inc.
  • Missouri Higher Education Loan Authority
  • Texas Guaranteed Student Loan Corporation

The DOE made the changes to improve the level of service provided to consumers. They chose companies that could provide the level of service borrowers need, helping them to get out of student loan debt rather than suffer through it.

Here’s the problem – most of these companies aren’t well known and the level of customer service the DOE is expecting may not happen.

Your Loans Aren’t being Sold

Here’s the problem many borrowers face – their credit reports state the loans were sold. That’s not the case. The Department of Education changed the loan servicers, not the company that owns the loan. But servicing changes can cause issues when they aren’t handled correctly.

The companies aren’t properly communicating with borrowers. The lack of communication means borrowers don’t know where to make their payments, how to log into their portal, or who to contact if they have questions about their loan.

This can lead to borrower default but not because you aren’t making your payments on purpose – you don’t know where to send them.

How can you Fix the Problem?

Your credit score will drop if you aren’t’ making your payments – the credit bureaus don’t differentiate between the reasons you defaulted. 

In other words, it’s your responsibility to find out who services your loan now. How can you do this?

Here are a few ways:

  • Open all mail – You aren’t going to recognize the name of the company sending the communication. You may mistake it as junk mail and toss it before you even open it. The servicers don’t know that you didn’t receive the information, so for now, open all mail to make sure you haven’t received communication.
  • Open all emails and check your portal – If you’ve always opted for e-communications, check your spam folder and log into your portal. You should have information there regarding who is servicing your account and how to contact them.
  • Call the Department of Education – If you have nothing, call the DOE and find out who has your loan. They can point you in the right direction, putting you in touch with the new servicer.

Fixing your Credit

If you’re finding the issues are with your credit report, you must get in touch with the credit bureaus and file a dispute.

Some of the most common problems borrowers see are loans reporting as closed or as having a $0 balance. There is a miscommunication somewhere and if the debt doesn’t report correctly on your credit, it can ruin your credit score.

You have free weekly access to all three credit bureaus until April 2021, so pull all three reports often. Check your trade lines and dispute any errors, especially those with your student loans. The credit bureaus have 30 days to respond to your dispute, so make sure you do it right away to minimize the damage to your credit score.

It doesn’t hurt to contact the servicer too. The more people you have on the task, the more likely it is to get fixed. Provide as much proof as you can to both the credit bureau and the current servicer regarding the loan balance, payment history, and any other information you need to share to get the problem fixed.

The Bottom Line

The key is to stay on top of your credit and your loans. You know you owe your student loan payments, so if you didn’t receive communication, don’t ignore it. Get to the bottom of the issue whether that means contacting the servicer, checking your mail, or logging into your portal. 

Even if you received communication, it’s important to check your credit report. You need to know if something was reported incorrectly as it could hurt your credit score. If you leave the errors uncorrected, the damage could be long-lasting and that’s the last thing you want right now.

Hope this helps!

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