If you have federal student loans, there is a good chance that you will fall out of your loan provider this year.
Navient, one of the largest servicers in the U.S., announced this week that it is exiting the federal student loan business and passing on its borrowers to Maximus, another federal loan servicer focused on defaults. loans. The move will require approval from Federal Student Aid (FSA), and will affect approximately six million borrowers.
Navient is the third lender to end its relationship with the government this year, following the Pennsylvania Higher Education Assistance Agency (also known as FedLoan), and Granite State.
That means the Department of Education will have to transfer more than 15 million borrowers, nearly a third of all borrowers, to new employees – a process that can cause confusion and can lead to mistakes, according to Robert. Farrington, founder and CEO of The College Investor, a site that provides advice about student loans.
“There’s going to be a lot of excitement,” Farrington said.
Moreover, 40 million students borrowing loans that have taken advantage of the endurance associated with the pandemic will start paying coming January 30, 2022.
Use the extra months of student loan custody to prioritize other aspects of your finances, such as building an emergency fund (if you haven’t already) or paying off more pressing debt with high interest.
Most people “probably haven’t looked at their student loans in 20 months, so you have to re-engage people with the fact that they have student loans,” Farrington said. “Combine that with the fact all their previous information, contacts, website logins, and letters received in the mail were from a company that will no longer be their future company.”
What to Do If Your Student Changes to a Server Loan
No need to panic if your student loan balance changes. Take this as an opportunity to check up on your student loans and prepare for repayment. Before transferring your debt to a new servant, you must do the following:
Track Your Loans
If the Department of Education transfers your debt from one servant to another, you must get a notice from both your current servant and your new one. But if you’re like most borrowers, you probably haven’t made student loan payments in nearly two years, so it doesn’t hurt to double check who your current debt servant is and who is your new. If you are not sure who your loan attendant is, log in to StudentAid.gov to find out. You can also find out by contacting the Federal Student Aid Information Center (FSAIC) by phone, live chat, or email.
“Keep track of your debts, find out what you owe, and update the login on your website,” Farrington said. “If you log in and see that you owe money to a company you don’t recognize, look for that company.
Update Your Contact Information
Make sure your personal information in your account, including your home address, phone number, and email, is up -to -date. That way, you can stay in the know about your loans and the duration of patience from your new loan attendant.
Keep Records of Your Student Loan Information
Farrington recommends saving or printing a copy of all your loan information, including your payment history, current loan balances, interest rates, and monthly statements. Having a record of your loans can help ensure they are accurate once transferred to a new lender.
“Hopefully you don’t need it, but it’s really nice to have that track record of information if things don’t transition smoothly in any way,” Farrington said. “Having your own paper trail will go a long way.”
It will also help you know who to contact if you are interested in exploring forgiveness, requesting a deferral, inclusion, or enrollment in an alternate payment plan.
Start Putting Together a Plan Today
You still have four months until the end of the student loan tolerance period, but experts recommend taking advantage of this extra time to move forward with your finances and make a plan for continuing to pay off. next year.
That looks different for everyone, but maybe for you, that means reducing or rearranging some spending areas now to have room in your budget in 2022. This could mean researching payment plans or getting started a spreadsheet to help you map out your payment strategy. The US Department of Education said the latest extension is the “final” one, so it’s best to get ahead of the curve while you can.
“Your first payment shouldn’t be paid until February,” Farrington said. “But in January, you should make sure you’re on the right payment plan, find out where you’re sending your payments, and can set up online billing so you know you’re squared off.”