Federal Student Loan Transfer from Navient to Maximus – Here’s What You Need to Know – Forbes Advisor

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If you have federal student loans, you can have a new loan manager by the end of the year, as approximately 5.6 million federal student loans once managed by Navient will transfer to Maximus. The transfer, approved by the federal student aid office in October, is just the latest in a series of service changes this year affecting federal student loans.

Earlier this summer, FedLoan Servicing and Granite State Management and Resources also announced that they would not renew their federal loan agreements, which are due to expire in December. Granite State loans will be transferred to Edfinancial, while FedLoan accounts will be split between several different departments. In total, more than 15 million borrowers will have a new loan manager early next year.

Here’s what a new student loan manager means and how to make the transfer process as smooth as possible.

What does a new student loan manager mean?

While the Department of Education funds your federal student loans, it contracts with companies to handle the repayment of those debts. Your loan manager facilitates your monthly payments, tracks your repayment progress, helps you sign up for a repayment program, and can suspend your payments with deferral or withholding.

It’s not that unusual for your loan to change hands, especially if you’ve been paying off debt for a decade or more. When your loan is transferred to a new manager, you shouldn’t have to do much. Your old server will work with your new one to transfer your account. Once the change is complete, you will simply start making your payments to the new business. But for the federal student loan system, it has not always been a smooth process.

A 2020 report from the Student Borrower Protection Center detailed the problems with transferring federal loans when Affiliated Computer Services (ACS) closed its service contract. When 35 million loans were transferred to other departments in 2013, some borrowers were not properly informed of the change, while other accounts were filled with errors. In some cases, ACS continued to charge borrowers after the transfer was complete, resulting in duplicate payments.

And since the start of the Covid-19 pandemic, federal student loan programs have experienced a period of particular flux. Federal loan payments and accrued interest have been suspended until January 2022, the Public Service Loan Forgiveness Program (PSLF) is being overhauled, and Congress is still debating increased loan forgiveness efforts .

All these actions have led loan managers to implement many changes in loan management. This doesn’t mean that future server transfers will have widespread issues, but it is wise to be careful and make sure your account transfers without a hitch.

How to make sure your student loan transfers smoothly

While your old and new loan officers should handle the transfer process, there are steps you can take to reduce potential mistakes. Here’s what you can do to stay on top.

  • Make sure your contact details are up to date. Your loan officer should contact you directly about the upcoming changes and the actions you need to take. Check that they have your correct email, address, and phone number. Also, be sure to promptly open any emails or letters sent by your old or new repairman.
  • Save your loan files. Print or save digital copies of your loan information with your former agent, including payment confirmations, records of your enrollment in repayment plans, and any progress you’ve made towards student loan cancellation. You can check that your account has been transferred correctly and you will have documented proof if any errors are introduced.
  • Set a reminder to verify your new account. Add a reminder to your calendar so you can verify your account after it’s transferred. Not only can you confirm that everything looks correct, it can also help you avoid missing your first payment to the new provider. Make sure you’re on the right payment plan and that any special circumstances, such as the pandemic-related break on federal loan payments, are still in effect on your account.
  • Create new login details and configure automatic payment. After your loan is transferred, you may need to create a new account on the service agent’s website and re-register for automatic payment, if you wish. You can also take note of any new due dates that apply to your new account.

Hopefully the transfer is done transparently and lending services are proactive in communicating with borrowers. But if you have any questions about the process or notice any errors in your account, contact both your old and new operators as needed. If they cannot resolve your issues, you can contact the Federal Student Aid Ombudsman Group or file a complaint with the Consumer Financial Protection Bureau (CFPB).

About Judith J. George

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