Student Loan Management Transfers Begin This Week As Services Disruption Spreads: Key Details
As the Department of Education grapples with a growing upheaval in the student loan service, some borrowers are already informed that their student loans are being transferred to a new service.
Two major national managers of student loans contracted by the Ministry of Education – Navient
Some of the loan service transfers are already starting. This week, the Ministry of Education quietly announcement that some borrowers whose accounts are with FedLoan Servicing will have their student loans transferred to MOHELA, another contracted loan manager for the ministry, in the coming weeks.
“We will soon begin to transfer certain groups of FedLoan Servicing borrowers to MOHELA,” the ministry said in a statement on Wednesday. “If you are an affected borrower, look for notices from us and FedLoan Servicing with more information about this transfer. Be sure to read these reviews in their entirety. Additionally, you can expect notifications from us and MOHELA once the transfer is complete. Also, be sure to read these reviews in their entirety.
MOHELA also posted an update on its own website. “If you recently received a notification from FedLoan Servicing that your loans will be transferred to MOHELA, welcome to MOHELA! Reads the notice. “Effective 10/04/2021, the US Department of Education (ED) will transfer / have transferred customer service from your federal student loan account from FedLoan Servicing to MOHELA, another member of the service team at federal ED loan. ” MOHELA notes in its statement that loan service transfers do not impact the terms, conditions or program eligibility for federal student loans.
It is not clear at the moment whether all FedLoan Servicing accounts will be transferred to MOHELA, or to some of them. The ministry’s statement suggests that other loan managers, in addition to MOHELA, could take over some accounts that were with FedLoan: continue over the next year. The Ministry did not immediately respond to a request for comment.
Meanwhile, Navient announced earlier this week that it had struck a deal with another provider, Maximus, to take over its government-held federal student loan portfolio. Maximus, like MOHELA, is another sub-contractor of the Ministry of Education; Maximus currently primarily manages delinquent federal student loans. However, no transfer to Maximus has yet started, as the ministry must first approve the arrangement proposed by Navient. No precise timetable has yet been announced.
Despite the lingering uncertainty, the Ministry urged borrowers to prepare for changes in the service of student loans. Borrowers should start taking steps now to protect themselves by updating their contact details, downloading and maintaining major student loan records (including important correspondence, payment histories, and other account information) and updating the automatic debit information, which will likely need to be renewed. as a result of any loan service transfer.
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