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Student Loan Servicer Navient Exiting Business — What It Means for Borrowers

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If you have federal student loans, there is a good chance that you will forgo your loan service this year.

Navient, one of the largest providers in the United States, announced this week that it will exit the federal student loan sector and pass borrowers on to Maximus, another federal loan company focused on non-performing loans. The transition will require approval from Federal Student Aid (FSA), and will affect about six million borrowers.

Navient is the third lender to terminate its relationship with the government this year, after the Pennsylvania Higher Education Assistance Agency (also known as FedLoan) and Granite State.

That means the Department of Education will have to move more than 15 million borrowers, nearly a third of all borrowers, to new services — a process that can cause confusion and can lead to errors, according to Robert Farrington, founder and CEO of College Investor, a website Offers tips about student loans.

“It’s going to be a lot of chaos,” says Farrington.

Furthermore, 40 million student loan borrowers who have benefited from the pandemic-related forbearance will begin to be repaid on January 30, 2022.

professional advice

Use those extra months of taking on a student loan to prioritize other aspects of your finances, such as setting up an emergency fund (if you haven’t already) or paying off more urgent high-interest debt.

Most people “may not have looked at their student loans in 20 months, so you have to re-engage people with the fact that they have student loans,” says Farrington. Combine that with the fact that all of the past information, contacts, website logins, and letters in the mail are from a company that won’t become their future company anymore.

What to do if a student changes service loan

Don’t panic if your student loan service changes. Take this opportunity to get a check on your student loans and get ready to pay off. Before your loan passes to a new employee, you must do the following:

Track your loans

If the Department of Education transfers your loan from one service to another, you should receive notice from both your current service and your new service. But if you’re like most borrowers, you probably haven’t made your student loan payments in nearly two years, so it doesn’t hurt to double-check who your current loan provider is and who the new one will be. If you are not sure who is responsible for the loan, log on to StudentAid.gov to find out. You can also find out by contacting the Federal Student Aid Center (FSAIC) by phone, live chat, or email.

“Track your loans, see what you owe, and update your website login information,” Farrington says. “If you log in and notice that you have a loan from a company you don’t know, find that company.

Update your contact information

Make sure you update your personal information in your account, including your home address, phone number, and email. This way, you can stay on top of your loans and have the patience of a new loan service.

Keep records of your student loan information

Farrington recommends saving or printing a copy of all loan information, including payment history, current loan balances, interest rates, and monthly account statements. Having a history of your loans can help ensure their accuracy once they are transferred to a new provider.

“Hopefully you’ll never need it, but it’s really nice to have a track record of information if things don’t go smoothly somehow,” says Farrington. “Having your own paper trail will go a long way.”

It can also help to know who to contact if you are interested in exploring forgiveness, requesting deferment, consolidation, or enrolling in an alternative payment plan.

Start making a plan together now

You still have four months until your student loan tenure expires, but experts recommend taking advantage of that extra time to get ahead with your finances and make a plan to resume payments next year.

This sounds different for everyone, but perhaps for you, it means shrinking or resetting certain spending areas now to have room in your budget in 2022. That could mean researching payment plans or starting a spreadsheet to help you chart your payment strategy. The US Department of Education said the latest extension is the “last” extension, so it’s best to precede the curve as much as possible.

“Your first payment won’t be due until February,” says Farrington. “But by January, you should make sure you’re on the right payment plan, know where to send your payments, and maybe repay your bill online so you know you’re away.”


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