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Your student loan servicer might change soon. Are you ready?
Nearly 10 million federal student loan borrowers will be transitioned to a new servicer by the end of this year after two student loan servicers—FedLoan Servicing and Granite State Management and Resources—have decided against renewing their contracts with the Department of Education (DOE).
Borrowers affected by the transition may be worried about what it will mean for their balances or progress toward loan forgiveness. But some experts say that panicking isn’t the route to take here—being proactive is, since in most cases, borrowers have no say in who ends up servicing their loans.
Here’s what you should know.
Why Are Some Student Loans Being Transferred to New Servicers?
The DOE contracts companies to manage and service federal student loans. These companies are responsible for billing, managing and collecting loan payments. To date, there are nine federal student loan servicers, according to Federal Student Aid (FSA), an office of the Department of Education.
Soon, though, there will only be seven. FedLoan Servicing and Granite State Management and Resources have both opted to not renew their contracts with the DOE. Both contracts will expire by the end of this year—just months after the federal…