Houston - When the pause on federal student loan payments ends January 31, millions of borrowers will discover their loan servicing company has changed. Loan servicers are the company you pay that manages your account.
The Consumer Financial Protect Bureau is sounding the alarm that this transition could lead to missed or delayed payments. So here's what you need to know.
"Reach out to your servicer today, and I caution you don’t wait until January 29 to do this," said Scott Buchanan, Executive Director of the Student Loan Servicing Alliance.
The time is now to act on your federal student loans.
FedLoan Servicing and Granite State have announced they will not service these loans next year.
The U.S. Department of Education is creating Next Gen, the Next Generation Financial Services Environment, with a centralized loan servicing platform, and transitioning from nine loan servicers to these five:
Edfinancial Sevices, LLC.
F.H. Cann & Associates, LLC.
MAXIMUS Federal Services, Inc.
Missouri Higher Education Loan Authority (MOHELA).
Texas Guaranteed Student Loan Corp.
"Some borrowers will be transitioning to a new servicer over the coming months," said Buchanan.
That means before the new company takes over your account, you should make sure your contact and banking information is current.
"Folks previously enrolled in auto-debit, you want to make sure you have the right bank account loaded into your servicer's files," he explained.
Print or download your payment records and correspondence, and clear up any discrepancies.
"Maybe we didn’t get a check from you that you have records of, so we can check that with your bank. And see if it did clear or if it didn’t," said Buchanan.
If you are in an income-driven repayment plan or the Public Service Loan Forgiveness plan, you may need to re-certify your income or employment.
And if you can't afford the same payments you were paying before the pandemic, contact your loan servicer about your repayment options.
"You could delay payments even further. You could take advantage of forbearance to add another month or two to get some time to get things together. And I mentioned income-driven repayment plans and graduated repayment plans," he said.