Navient a announcement it will no longer serve federal student loans, leaving about 6 million borrowers waiting to be matched with a new lender.
The company was one of the largest providers of services to the US Department of Education and its massive, outstanding $ 1.7 trillion student loan portfolio. Some 44 million Americans are in debt for their education.
Two other lenders ended their relationship with the government this year: the Pennsylvania Higher Education Assistance Agency, also known as FedLoan, and The granite state.
With the exit of these three companies, about 16 million federal student loan borrowers will be assigned a new service, according to a higher education expert. Marc Kantrowitz.
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“Problems can arise with any transition, so there are a few things borrowers should do now if their agent changes,” Kantrowitz said.
As soon as possible, log into your current loan officer website and save or print a copy of your loan information, Kantrowitz said. Having this record can ensure that your loan information is correct after it is transferred to a new service agent.
“Get a list of all of your loans, including your payment history, current loan balances, interest rates and the amount of monthly loan payments,” he said.
Check that your service agent also has your current contact information, so that you receive all notices regarding the upcoming change.
The government’s payment hiatus and interest waiver for federal student loan borrowers, which have been in effect since March 2020, is expected to end in February.
If you do not qualify for either, you can use a abstention to continue to suspend your bills. But keep in mind that interest will accumulate and your balance will be larger (sometimes much larger) when you start paying again.
If you expect your difficulties to persist for a while, it may be a good idea to sign up for an income-based repayment plan. These programs aim to make borrowers’ payments more affordable by capping their monthly bills at a percentage of their discretionary income and forgetting any remaining debt after 20 or 25 years.