When you graduated high school and accepted your financial aid package to go to the college of your dreams you most likely were not thinking about student loans.
In fact, you were most likely more concerned about which dorm room you were staying in and which dining hall was open the latest on the weekends. However… something interesting happens six months after your college graduation.
Happy to be done with college and hopefully working in your new career field (or more common these days – searching for a career in your field) you come home one evening and check the mail.
When you open the mailbox up you find a vague letter from one of the following:
- Great Lakes
- For a full list of all services, use this link.
Not sure whether to be excited or remain confused, you hastily open the letter to quickly find out it is a federal student loan service company contacting you about your student loans.
Meanwhile all the feelings of excitement about dorm room food have since faded and now you are faced with the reality that it is time to start paying your student loans. But here is the big question:
- What federal student loan services companies provide
- The 7 Biggest student loan service providers
- How to manage student loans. See FAQ below:
Frequently Asked Student Loan Servicing Questions
What do federal student loan servicers do?
Student loan service companies provide support to student loan borrowers in the form of processing/managing payments, processing requests and answering borrower questions.
Can I change my student loan servicer?
No, student loan borrowers cannot change their student loan servicer since they’re contracted by the federal government. Borrowers can request a deferment or look to refinance student loans.
Can I consolidate my federal student loans?
Student loans are issued and disbursed per need of the borrower and thus serviced in a similar manner. Consolidating is possible through refinancing with a private company.
What is a Federal Student Loan Servicer anyways?
In the 4th quarter of 2018, there was $1.43 trillion dollars worth of federally funded student loans in total.
Considering the working pace of most federal organizations, managing close to 1.5 trillion worth of student loan debt would be no easy task for the government. So instead, federally funded student loans such as direct loans, federally funded family loans, and Perkins loans are managed by student loan servicing companies.
The main roles of student loan servicers is to:
- Collect, manage and track payments.
- Help borrowers with questions & changing repayment plans.
- Process deferment and forgiveness requests
- Help customize payment plans
- Certify student loans for PSLF (Public service loan forgiveness)
How to Contact & Find Your Student Loan Servicer
You can start by going to the National Student Loan Data System, which is the U.S. Department of Education’s database for student aid to find your student loan servicer.
Use the link above if you don’t know who your provider is but you want to find out. If you need to get in contact with your student loan servicer you can use the contact information for each below.
Note: The link above is useful if you receive suspicious mail mentioning consolidating or loan terms or just using the contact information below.
Contact Information for Student Loan Servicers:
If you’re looking to figure out more about your student loans, repayment status, payment history, foreginvess, deferment or just about any other possible question you might have reach out to your student loan servicer.
The purpose of student loan servicers is to answer the questions and help the federal government with student loans (Collecting payments, issuing student loans, processing requests)
Below you will find the address, number and email for each of the big student loan service companies:
Aspire Resources Inc.
Address: PO Box 65970, West Des Moines, IA 50265-0970
Phone Number: (855) 475-3335
Address: P.O. Box 36008 Knoxville, TN 37930-6008
Phone Number: (855) 337-6884
Great Lakes Educational Loan Services Inc.
Address: PO Box 7860m Madison, WI 53707-7860
Phone: (800) 236-4300
Address: 633 Spirit Drive, Chesterfield, MO 63005-1243
Phone Number: (888) 866-4352
Address: P.O. Box 9500, Wilkes-Barre, PA 18773-9500
Phone: (888) 272-5543
Address: P.O. Box 82561, Lincoln, NE 68501-2561
Phone: (888) 486-4722
Can you switch student loan servicers?
Student loan service companies are assigned by the government, thus borrowers can not switch service providers. As more and more borrowers emerge each passing year, student loan servicing companies are becoming more efficient and transparent.
Processes and systems used to better serve the borrower are being improved. In the event an arise it is best to first contact your student loan servicing company. If for some reason a student loan servicing company is not being cooperative, you can contact the Consumer Financial Protection Bureau.
The only option to switching student loan service companies is to refinance federally backed/funded student loans to private loans. Always keep in mind (See at the end) the pros and cons of refinancing student loans.
Complaints About Student Loan Servicers
If you have student loans you may have heard or even experienced issues with student loan service companies. Student loan companies have done some interesting things in the past such as…
- Keeping borrowers in the dark when they thought their loans were paid off
- Not helping allocate funds to the proper loans in ways the help instead of hurt borrowers
- Mess with early payments so that you can’t pay off student loans quicker
All of the above have actually occurred on numerous occasions, which is why the Consumer Financial Protection Bureau (CFPB) released a 152 page report addressing public comments and complaints. The biggest issues from over 30,000 comments were addressed in the report and highlighted the following screenshot from the report:
Most complaints levied revolved around repayment issues, student loan service provider transparency, and inconsistent student loan policies. At the time of the report there were some 41 million student loan borrowers with an outstanding balance of $1.2 trillion.
With such a large amount of student loan borrowers, student loan servicing companies like Mohela, Aspire and Great lakes play a critical role between the borrower and lender. Student loan servicing companies manage borrowers accounts, track repayments, and serve as a liason.
Most issues with student loan service companies stem from the lack of consistent and market wide policies for servicers. If you have a complaint about your current student loan provider you can:
- First contact your student loan service provider
- If your issues are not resolved, reach out to the Federal Student Aid: FSA Feedback
Two options instead of using your current student loan service company.
Recapping what student loan servicing companies provide:
- Manage and process payments, track accounts
- Process forms, deferment, and Public Service requests
- Service student loan borrowers
But what if you’re not interested continuing to use your current student loan service provider?
In the case you are ready to move on from your student loan provider for whatever reason, here are several options to getting out from under your student loan servicing company.
1. Pay off your student loans as fast as possible.
See how much money you can pay extra each month towards your student loans using reverse budgeting, and pay that amount monthly.
Paying student loans quickly tips:
- Target one loan at a time, either using the debt snowball or avalanche.
- Make sure you manually pay and allocate money towards one specific loan (And if your student loan servicing company doesn’t apply the money correctly, immediately contact them)
- Build an emergency fund and pay your loans off as quickly as possible
2. Refinance your student loans.
If paying extra towards your student loans isn’t in the deck of cards for you, (1 in 4 loan borrowers are in default), then the only other way to get out from under your federal servicer is to refinance your student loans.
Refinancing student loans is not a one size fits all. Variables such as interest rates, federal perks, loan terms and monthly minimums all vary from borrower to borrower. The pros and cons of refinancing include:
- New terms
- Lower interest rates
- New loan provider
- Save money and easier to manage payments
- Longer loan terms
- Lose federal loan perks
- Private lenders have different terms (No PSLF, deferment, etc)
- Consolidating loans can cost more over time
Just be sure to consider all angles before refinancing with a private lender. If you decide to move forward, consider using Penfed refinancing or Lendkey.
My Take: Federal Student Loan Service Companies
Figuring out who your student loan servicer was and what they do should be easier now that you have read this article. At the end of the day, their role is to provide service to the borrower.
Student loan service companies receive a percentage of the monthly interest that you pay as compensation for their services. In other words you’re paying them.
So if you have an issue, don’t hesitate to contact them with any concerns at any time.
Q: What is your experience with the federal student loan service companies?
Josh writes about ways to make money, pay off debt, and improve yourself. After paying off $300,000 in student loans with his wife in less than five years, Josh started Money Life Wax and has been featured on Forbes, Business Insider, Huffington Post, and many more! In addition to being a life-long entrepreneur, Josh and his wife enjoy spending time with their newborn son, their chocolate lab named Morgan, working out, being outside, traveling, and helping others with their finances! In case you were wondering, Josh uses Personal Capital to track his net worth and his first investment account ever was an Acorns account 😎