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What is Federal Loan Servicing?

There are nine federal student loan servicers that work with the U.S. Department of Education to manage student loans.

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Have you received emails or letters from companies like MOHELA, Great Lakes, and Edfinancial who seem to know a lot about you and your student loans, and wondered who they are?

These, along with several other companies, are legitimate federal student loan servicers who work with the U.S. Department of Education to manage federal student loans.

What is federal loan servicing?

When you take out a federal student loan from the U.S. Department of Education, the U.S. Department of Education will assign you to one of nine loan servicers, who they work with. This is done when your loan amount is first paid out to your school.

What is a loan servicer?

A loan servicer is a company that handles the billing and other services on your federal student loan on behalf of the U.S. Department of Education. This is at no cost to you.

Your loan servicer will, for example, send you federal loan bills, receive loan payments from you, and work with you on loan consolidation and repayment plans.

Is the loan servicer the lender?

No, the loan servicer is not the lender. The lender is the U.S. Department of Education. The loan servicer simply manages your student loan on behalf of the lender, the U.S. Department of Education.

Do I choose which federal student loan servicer I use?

No, you do not choose who your loan servicer is. The U.S. Department of Education assigns you a loan servicer.

Your federal student loan servicer will contact you after the first payment is made.

Sometimes the U.S. Department of Education will transfer loans from one servicer to another servicer. When this happens, you will be notified. Your loans are still owned by the U.S. Department of Education, but the company who will be sending you loan bills and collecting your loan payments will change.

Who are the federal student loan servicers?


Source: AssetBrief

There are nine federal student loan servicers for loans taken out from the U.S. Department of Education.

Federal student loan servicers
Great Lakes
MOHELA
Edfinancial Services (HESC)
Granite State Management & Resources Student Loan Servicing (GSMR)
FedLoan Servicing (PHEAA)
Nelnet
OSLA Servicing
CornerStone
Navient

Who is servicing your federal student loan?

If you are not sure who your federal student loan servicer is, you can check this in two ways.

My Federal Student Aid

You can go to My Federal Student Aid, a U.S. Department of Education website, to see information about all of your federal loans, including who your loan servicer is.

Federal Student Aid Information Center

You can also call the Federal Student Aid Information Center (FSAIC), a U.S. Department of Education center.

Federal Student Aid Information Center phone number:
1-800-433-3243

How does your federal loan servicer work with you?

Set up your online account
Create an online account to access your loan information, make payments, review loan details, update your contact information, sign up for email correspondence, and more.
Get the mobile app
Some federal student loan servicers have mobile apps, where you can check your balance, make payments, and send and receive messages.
Make automatic online payments
Set up auto payments from your bank account to your federal student loan servicer and you may receive a 0.25% interest rate deduction.
Give your parents or spouse access to your account
Provide your parents or spouse access to your loan account.
Sign up for income-driven repayment plans
You can sign up for an income-driven repayment plan. This may lower your monthly payments, which are based on your income, family size, loan balance, and type of federal student loan. After making 20-25 years of loan payments, your remaining loan balance may be forgiven.
Change repayment plan
You can change your repayment plan type. Federal student loan servicers offer several types of repayment plans which are based on length of time and income.
Make extra payments
You can choose to repay more than what your repayment plan states. This may reduce how much you pay later.
Postpone payments
If you are unable to make your monthly payment, you can contact your federal student loan servicer to request deferment or forbearance.
Sign up for loan forgiveness
Under certain circumstances, such as working in public service or working as a teacher in low-income schools, you may be able to have your loan forgiven.
Sign up for military benefits
Most federal student loan servicers offer benefits to those in the military including deferments, interest caps, public service loan forgiveness, and more.

Can you switch to a new student loan servicer?

The U.S. Department of Education may transfer loans from one servicer to another. When this occurs, you will be notified. However, you do not get to select your federal student loan servicer.

The only time you can change your student loan servicer if when you:

  1. Consolidate your loans
  2. Apply for public student loan forgiveness

Alternatively, you can refinance with a private lender. By doing this, you forfeit federal loan forgiveness programs and income-driven repayment plans. Instead of having your loan managed by the U.S. Department of Education and your current federal student loan servicer, your loan will instead be managed by a private bank, online lender, or credit union.

How to contact your federal loan servicer

To contact your federal loan servicer, you can call the numbers below.

Federal student loan servicers Contact number
Great Lakes 1-800-236-4300
MOHELA 1-888-866-4352
Edfinancial Services (HESC) 1-855-337-6884
Granite State Management & Resources Student Loan Servicing (GSMR) 1-888-556-0022
FedLoan Servicing (PHEAA) 1-800-699-2908
Nelnet 1-888-486-4722
OSLA Servicing 1-866-264-9762
CornerStone 1-800-663-1662
Navient 1-800-722-1300

How to submit a complaint about your federal loan servicer

If you are having problems with your federal loan servicer, there are several ways to file a complaint.

Directly to the federal student loan servicer

You can file a complaint directly with your federal student loan servicer.

U.S Department of Education Federal Student Aid Feedback System

You can file a complaint with Federal Student Aid at the U.S. Department of Education through their feedback system. File a complaint here.

Better Business Bureau (BBB)

You can also file a complaint with the Better Business Bureau (BBB), a private, non-profit organization that accredits and rates businesses. File a complaint here.

Complaints filed with the BBB are forwarded to the federal loan servicer within two business days, and loan servicer will be asked to respond within 14 days. If the loan servicer does not respond, the BBB will reach out to them again.

BBB complaints are generally closed within 30 business days.

U.S Department of Education Federal Student Aid Ombudsman Group

As a last resort, you can contact the Federal Student Aid Ombudsman Group, a confidential resource to help resolve disputes about your federal student loans. File a complaint here.

The Federal Student Aid Ombudsman Group can help you resolve problems with loan balances and payments, disbursements, overpayments, and more.

They provide an information checklist to help prepare for your conversation.

Federal Student Aid Ombudsman Group address:
U.S. Department of Education
FSA Ombudsman Group
P.O. Box 1843
Monticello, KY 42633

Federal Student Aid Ombudsman Group phone:
1-877-557-2575

Federal Student Aid Ombudsman Group fax:
606-396-4821

FAQ

Is the federal student loan servicer federal or private?

The federal student loan servicer is a private company. It is not a U.S. federal organization, but it does work with the U.S. Department of Education to manage student loans.

For example, the federal student loan servicer will send loan payment bills, receive loan payments, and work with you on loan consolidation and repayment plans.

Is the federal student loan servicer a government agency?

No, the federal student loan servicer is a private company that works with the government to service student loans.

Does the federal student loan servicer forgive student loans?

Yes, the federal student loan servicer will forgive student loans depending on the circumstance. There are two loan forgiveness programs:

  1. Public Service Loan Forgiveness (PSLF)
  2. Teacher Loan Forgiveness

Public Service Loan Forgiveness

If you work for the government or a not-for-program organization, and have made 120 payments on your loans, you may be eligible to have your Direct Loans forgiven.

Direct Loans are loans made under the William D. Ford Federal Direct Loan Program and include:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans for Parents
  • Direct Grade PLUS Loans
  • Direct Consolidation Loans
  • Direct PLUS Consolidation Loans

Teacher Loan Forgiveness

Teachers who have taught for five full and consecutive academic years in low-income schools may be eligible to have up to $17,500 of their Direct Loan or FFELP program loans forgiven.

Can the federal student loan servicer take my tax return?

The federal student loan servicer does not take your tax return, but will provide an IRS Form 1098-E to borrowers who pay $600 or more off interest on qualified student loans during the year.

You can submit your 1098-E form to the IRS, and you may be eligible to deduct a portion of the interest you pay on your federal tax return.

Federal student loan servicers

There are nine federal student loan servicers. Learn more about who they are, what they do, and how to contact them.