What Role Do Student Loans Servicers Play In Federal Student Loans?
The United States Department of Education is responsible for policy, administration and coordination of most federal assistance to education. This includes providing student loans to secondary education students through a program called the William D. Ford Federal Direct Loan Program (sometimes referred to as “Direct Loan” or “FDL”). Before July 1, 2010, federal student loans were originated by private banks who gave out loans that were guaranteed by the federal government under the Federal Family Education Loan Program (“FFEL”).
The Department of Education hires companies called “loan services” to administer the both Direct loans and FFDL loans. These loan servicers are who borrowers in good standing deal with regarding their federal student loans. The loan servicers send billing statements, accept payments and offer deferments and forbearances. Federal student loan servicers are, by law, obligated to help borrowers avoid default. For this reason, the loan servicers will assist borrowers with repayment options and programs. Some of these programs include income driven repayment programs where a borrower’s monthly student loan payment is determined based upon a percentage of the borrower’s income.
Federal student loan servicers only deal with loans in good standing. Defaulted federal student loans are transferred from the loan servicers to debt collectors.
The following is a list of federal student loans servicers:
| CornerStone | 1-800-663-1662 |
| FedLoan Servicing (PHEAA) | 1-800-699-2908 |
| Granite State (GSMR) | 1-888-556-0022 |
| Great Lakes Educational Loan Services Inc. | 1-800-236-4300 |
| HESC/Edfinancial | 1-855-337-6884 |
| Higher Education Loan Authority of the State of Missouri (commonly referred to as “MOHELA”) | 1-888-866-4352 |
| Navient | 1-800-722-1300 |
| NelNet | 1-888-486-4722 |
| OSLA Servicing | 1-866-264-9762 |
It is not uncommon for the Department of Education to transfer a loan from one servicer to another. This is not a sale of the loan, in the case of FDL loans the loan is still owned by the Department of Education, the loan is just transferred for servicing purposes.