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If you’ve had a bad experience with your loan servicer, you might be wondering how to change student loan servicers. Fortunately, there are a few ways to switch student loan servicers if you’re eager for a new entity to handle your student loans. Here’s how.
- How to change student loan servicers
- Can’t switch student loan servicers? Use trusted resources to educate yourself
Student loan servicers handle your payments and other services, and they’re supposed to help you successfully navigate debt repayment. But unfortunately, some loan servicers aren’t so helpful and end up giving borrowers incomplete or even misleading information.
For example, there are currently several lawsuits against Navient, one of the federal student loan servicers, claiming that it harmed borrowers with misinformation. If you’re fed up with your student loan servicer, one of these approaches could help you switch to a new (and hopefully better) one.
First, you get to choose a new student loan servicer when you consolidate your federal student loans. Most borrowers apply for a Direct consolidation loan to simplify repayment or get on a new repayment plan.
But Direct consolidation also lets you choose a new loan servicer from among the federal loan servicers. These are your options:
- FedLoan Servicing
- Edfinancial Services
- Great Lakes
- Granite State Management & Resources Student Loan Servicing — GSMR
Before selecting, do some research on consumer reviews to find one with a decent reputation. While none are free from consumer complaints, Great Lakes seems to have less complaints on average, whereas Navient typically has the most.
A second option for changing student loan servicers is refinancing your loans with a new lender. While only federal loans are eligible for Direct consolidation, both private and federal loans are eligible for refinancing.
But to qualify, you’ll need to meet a lender’s requirements for credit and income. If you do, you could switch to a new lender and loan servicer, hopefully one with a better reputation for customer service than your current loan servicer.
Plus, you might get the added perks of scoring a lower interest rate, combining multiple loans into one, and adjusting your monthly payments with new repayment terms. The potential downside, though, is that refinancing federal loans turns them private, making them ineligible for federal programs.
If you’re interested in refinancing, make sure to read customer reviews to ensure you get a loan servicer that’s more helpful than your previous one. And don’t forget to shop around with a few different lenders to find the best rate.
If you’re working toward Public Service Loan Forgiveness (PSLF), you’ll need to get your federal student loans on an income-driven repayment plan. When you apply, let your current student loan servicer know that you’re working toward PSLF.
Then, your loan servicer should switch you to FedLoan Servicing, which handles all PSLF applications. Although you don’t have a choice of student loan servicers, you might find a better experience with FedLoan Servicing than your last loan company.
If none of these approaches work for you, there might not be much you can do at this point to switch student loan servicers. But that doesn’t mean you’re out of luck.
Instead of relying solely on your loan servicer to provide information, take it upon yourself to learn about student loan repayment plans and strategies.
Look to trusted resources to educate yourself on your loans, especially since loan servicers don’t always seem to provide the best information (and sometimes work against the best interests of borrowers).
By arming yourself with knowledge, you’ll be able to make the best decision with your student loans without having to rely on a not-so-helpful loan servicer.
Want better rates? Here are the best banks to refinance student loans:
|Variable rates start at...||Fixed rates start at...||Repayment terms||Welcome bonus||Check your rates|
|4.54%||4.49%||5 - 20 years||$200||Visit LendKey|
|4.99%||4.47%||5 - 20 years||$200||Visit Earnest|
|4.22%||3.97%||5, 7, 10, 15, and 20 years||$120||Visit Laurel Road|
|4.53%||4.40%||5 - 20 years||$100 or $200, depending on the amount you refinance||Visit Credible|
|5.09%||4.74%||5, 7, 10, 15, and 20 years||$100||Visit SoFi|
|4.53%||4.83%||5, 7, 10, 15, and 20 years||$100||Visit ELFI|