This story is evolving.
You may have a new Student Loan Service Officer by the end of this year.
Here’s what you need to know.
There is an important announcement today that could impact your student loans early next year, and it concerns one of the nation’s leading student loan service centers:
- As the first reported Michael Stratford from PoliticoFedLoan Servicing will not renew a 12-year contract with the US Department of Education to service federal student loans.
- FedLoan Servicing, also known as the Pennsylvania Higher Education Support Agency (PHEAA), serves student loans to approximately 8.5 million student loan borrowers, which is about 20% of all federal student loan borrowers.
- It is important to note that FedLoan Servicing is the only student loan servicing service that serves federal student loans for the government services loan forgiveness program that helps student loan borrowers who work for a qualified government service or nonprofit employer obtain student loan cancellations.
- The current FedLoan Servicing contract expires on December 14, 2021.
- Student Loan Services helps student loan borrowers manage student loan payments, answer questions about student loans, and help with student loan repayments.
- Whether your student loan service center is FedLoan Servicing or another student loan service, you can still contact your student loan specialist during the Covid-19 pandemic at any time.
What does this mean for your student loans
If FedLoan Servicing is your current Student Loan Servicing agent, you can look forward to a new Student Loan Servicing Specialist in December. This is especially important for any student loan borrower seeking a public service loan forgiveness – a program that has suffered from 2% or less approval rates for years, which has prevented thousands of student loan borrowers from obtaining student loan cancellations. The US Department of Education has not announced which student loan service provider will take over existing federal student loans. Student loan borrowers must continue to make student loan payments, if applicable, in the normal course of business. Currently until September 30, 2021, federal student loan payments, including the government service loan forgiveness program, are not required due to the temporary cancellation of the student loan. If FedLoan Servicing is not your student loan service, there is no other indication that your current student loan service will change.
Make sure you have a clear action plan for paying off your student loans. Even if a student loan is canceled, you may not be eligible and the student loan cancellation amount may not cover the entire balance of your student loan. Here are some popular options: