If your federal student loan servicer changes, it means you’ll be dealing with a different company for loan management, payment processing, and customer service. This usually happens when federal contracts expire or your loan status changes. While the transition is designed to be seamless, it’s your responsibility to confirm that everything updates correctly.

Understanding Loan Servicer Changes

You don’t get to choose your student loan servicer, but you might be assigned a new one under certain circumstances. This typically happens when your servicer’s contract with the United States Department of Education ends. You may also get reassigned if you consolidate your loans, apply for Public Service Loan Forgiveness (PSLF), or go into default.

You’ll typically receive a notice two weeks prior to your loans being transferred. Said notice will include your new servicer’s name and contact information. Once the transfer is complete, you may need to set up a new online account and re-enroll in autopay.

Fortunately, a servicer change won’t alter your loan status, balance, or interest rate. It may show up on your credit report as a new account, but it shouldn’t affect your credit score. That said, it’s a good idea to review your credit report after a transfer to confirm that your loan details were reported accurately.

Immediate Steps to Take

When you find out your servicer is changing, here’s what you can do to stay on top of the transition.

• Check your mail and email regularly for updates from both your old and new servicers.
• Log in to your new servicer’s portal to verify your loan details, payment due date, and contact information.
• Save your past payment records and communications with your previous servicer.
• Watch out for duplicate autopay withdrawals during the first month and contact the servicer if anything looks off. 

Ensuring Payment Continuity

Your most important responsibility during a servicer change is ensuring your monthly payments are still made on time. Even a brief disruption can lead to late fees or affect your progress toward student loan forgiveness.

Should you find that your payments aren’t being processed correctly, you can contact your old and new servicers for assistance. If the issue persists, you should file a complaint with the Education Department’s Office of Federal Student Aid.

Be sure to save copies of your account information and payment history, as well as communications with your old and new servicers, especially if you’re enrolled in programs like PSLF or an income-driven repayment (IDR) plan. Having documentation can help if anything needs to be corrected later.

The Bottom Line

Servicer changes are routine, but mistakes can still happen. The best way to protect your finances is to stay informed and be proactive. Check any emails you get from your servicers, log into your accounts regularly, and keep records of everything. By monitoring your student loans during a transfer, you can ensure the change won’t interfere with your payments or your peace of mind.