December 3, 2010
Student Loans at Two Federal Servicers?
Due to some legislation Congress passed almost two years ago now, many student loan agencies were required to transfer the student loans disbursed from July 1, 2008 to July 1, 2010 to the federal government for servicing. Many of you borrowers may be thinking: So what? Isn’t this old news? Well: yes and no.
As many of you have experienced, this transfer resulted in what we call a split borrower — not that we think you’ve been split in any way, mind you — but your loans were. Many borrowers had loans that were moved to FedLoan Servicing, and many already had loans that were located with one of the other four government servicing agencies — namely, Nelnet, ACS, Great Lakes Educational Loan Services, and Sallie Mae.
This resulted in separate federal payments to separate federal servicing agencies (for example, some of you ended up with loans that were with Sallie Mae and FedLoan Servicing). It required some juggling on your part, with maintaining multiple payments to multiple sources, as well as applying for alternate repayment options multiple times.
Good news! Soon, you “split borrowers” will once again be a little bit more whole: due to a transfer initiative, the federal government is making efforts to transfer all students’ federally-serviced loans so that they are with one federal servicer. One payment. One due date. One servicer.
This recent change will not impact loans that are currently held at UHEAA. Those loans are not owned by the government and will remain as they are. None of your loan terms will change on the loans UHEAA holds — your interest rates, your current loan status, and your repayment terms will all remain the same.
WHAT THIS MEANS: You need to watch your mail. Once more, with feeling: You need to watch your mail! Once your federally-owned loans have been transferred so they are all with the same place, you will be notified by mail. Regular mail. Snail mail, if you will. This mail will come from the federal servicer to which all your loans have been transferred.
It is anticipated that the greater bulk of this transfer will be complete by the end of December. Seven to ten business days after your loans are transferred, you will also see the changes reflected on the National Student Loan Data System.
Did I mention that you should watch your mail?
(Please feel free to post questions or add to the conversation!)Posted by: kvanausdal