How to Handle a Change in Student Loan Servicers for a Seamless Transition
November 27, 2013

Calling all student loan debtors! This is a warning to be sure and keep your contact information up to date with your loan servicer every time you have a change in address, email or phone number. It’s easy to be complacent if you have auto debit and have back-burnered your student loan considerations to a monthly entry on your bank statement.

Why is it so important to keep your servicer up-to-date on your whereabouts? If there is a change – if your loan is sold or your lender changes loan servicers for whatever reasons – obsolete contact information can mean you miss out on all-important notifications. This can take you from being a solid student loan paying citizen to one that’s delinquent before you even notice that something has gone awry.

Why Loan Servicers Change

In the case of federal student loans, the government contracts with various providers to manage student loan repayment. Direct Loan Servicing Center (aka ACS) was the long-time servicer for a large swath of student loan accounts. But effective the end of August 2013, the government cut ties with ACS and farmed out loans to other providers.

As of 9/1/2013, FedLoan Servicing, Great Lakes Educational Loan Services, Nelnet and Sallie Mae took on loans once serviced by ACS. This could have been predicated by a cost shift, intense lobbying or a myriad of other reasons. From the borrower perspective, it doesn’t matter so much why the change was made, but how it will affect you.

Beware changes in loan servicers

How You Should Be Notified of a Change

When loan servicers change, you should be given ample heads up – but often that doesn’t happen. This means a letter or email (or both) will be sent to your physical and/or digital address of record once the decision has been made to change servicers. But what if you’ve been slack about updating your home address? What if you finally abandoned You may have missed this all-important notice!

You may have received notice from your old servicer saying they’re no longer servicing your loan. Or you may have received notice from a new servicer saying “pay us instead,” or you may have received no notice at all. The latter two instances are more disturbing and can leave you uncertain or in trouble. Sometimes this notice may come after your loan has already been handed over to the new servicer and this can cause you last minute panic – understandably and justifiably so…

Information Transfers, Auto Debit Doesn’t!

You should be a creature of habit and always look for the auto debit on your statement if that’s how you pay. If you send in checks, pay attention and make sure they clear each month. This can alert you to a processing problem and let you know that you may have missed a notification of a change in servicers. Some information will transfer to your new servicer and some won’t.

Bank information for electronic transfer will NOT transfer from one servicer to another. Your basic loan information will transfer to the new servicer. Your preferences for how you like to receive notices and statements may not transfer from one servicer to another. And remember, if you have multiple loans (and who doesn’t unless you’ve consolidated?) you may have multiple servicers which can mean many changes to juggle at once!

Student loan statements can indicate servicer change

Be alert for a change in your student loan servicer.
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What to Do If You Have Problems with a Servicer Change

The bottom line is that it is your responsibility to always be on top of your student loan repayment. Putting it on auto-pilot and then out of mind is not a good idea. If you notice a hiccup in your payments in the form of no auto debit in a given month or your check not clearing, you need to address the issue ASAP. NSLDS always displays which loan servicer is handling your loans, so you can check there to see if there is a change.

Another way to ensure you stay current and in good standing with your student loans is to sign up for’s free student loan management tool. In addition to being able to track your student loan, we keep you up to date with notifications on your payments and progress. This can alert you to issues even if you’ve put your loans on mental cruise control and save you heartache. Click here to sign up!