- Student loan service company Granite State Management and Resources does not renew its contract with the state.
- The government will transfer your GSMR loans to another lender, although the details are unclear.
- Keep copies of all relevant student loan documents in case they get lost in the transition.
- Read more about Personal Finance Insider loan coverage here.
Granite State Management and Resources, a student loan company serving federal loans, announced on monday he will not renew his contract with the government after December. If you are one of the 1.3 million borrowers served by GSMR, the Ministry of Education will transfer your loan to the new company after the contract expires, although the details are unclear.
The Pennsylvania Higher Education Promotion Agency, another federal loan servicing agency, took a similar step two weeks ago when it announced he will not renew his federal contract. Thus, the total number of borrowers in constant motion is almost 10 million.
Fortunately, there are a few things you can do to prepare for the transition – or avoid it altogether, if you wish.
Document all your current documents
One of the biggest problems you can face when your loans are transferred from one student loan provider to another is the lack of consistent record keeping. Make sure you can prove that you made payments on your loans on time so that you can print or download the payment history from the lender’s website and keep it in a safe place.
Tracking your payment history is especially important if you are in Government Service Loan Forgiveness programs or participate in income-driven repayment planas the time spent paying off these loans is critical in order to ultimately get the student loan forgiveness.
You must also keep copies of all correspondence between you and your loan agent, including anything related to your PSLF registration or income-based repayment plan. Save hard copies and upload digital copies to the cloud whenever possible.
Keep track of your credit report
When your loan is passed from one provider to another, you may experience erroneous negative credit reporting, such as an incorrect missed payment. It can still degrade your credit score if you don’t notice it, so get a copy of your credit report and know where your account is now.
You can find your credit report for free at Annualcreditreport.com from any of the three major credit bureaus on a weekly basis until April 20, 2022. Although this report will not include your credit rating, it will provide information about your credit history and payment history that lenders use to make a decision on whether to grant you a loan. Viewing your credit report can help you figure out what you need to improve.
Get New Maintenance Workforce With Federal Direct Consolidation Loan
If you have multiple federal student loans from your lender, you may want to consider bundling them into one monthly payment with Direct Consolidation Loan and getting a new loan officer. Here are the advantages and disadvantages of consolidation:
Refinance a loan from a private company
If you want to select a new supplier without waiting for the government to transfer you to another position, you may want to consider a private lender. You may be eligible for a lower interest rate or for a term that better suits your needs from a private company. You may be able to get a variable rate loan from a private lender, while you can only get a fixed rate loan from the government. You can find our list best private student loans here…
However, be careful before doing this because you will lose federal protection if you refinance with a private lender. You will not be eligible to opt out of COVID-19, which is currently valid until September 30, 2021. In addition, the Biden administration continues to consider student loan forgivenessthat does not apply to private loans.
For any additional questions, please contact the service personnel.
Since the federal government is deciding how to transfer nearly 10 million borrowers to a new service company, your service staff will likely have the very latest information on where your loan goes next time and can probably answer any questions.
If you do not want to deal with the lengthy process of changing student loan companies, you can take steps to change your service company now. Otherwise, just keep a close eye on your documentation to avoid mistakes in the transition.