Whether you realize it or not, federal student loan servicing is not handled directly by the fed itself. If you used federal student loans to fund some (or all) of your college tuition, you have had to deal with a federal student loan servicer.
In 2010, the Obama administration terminated the Federal Family Education Loan Program (FFELP). Since then, all student loan funds are disbursed directly by the Department of Education through its Direct Loan program. Despite this, various organizations assist with handling student loans after they have been funded.
These loan servicers are organizations that handle payments, refinancing, customer service, and anything else you may need. But who are these mysterious organizations? And is one better than the rest?
How Many Student Loan Servicers Are There?
Here is the current list of federal student loan servicers:
- FedLoan Servicing (PHEAA)
- Granite State – GSMR
- Great Lakes Educational Loan Services, Inc.
- OSLA Servicing
Even within this list, there have been numerous changes over the years. For example, American Education Services (AES) is not on the above list. Although AES still exists, they are no longer servicing new federal student loans as of the end of the FFELP program in 2010.
Other changes have occurred, too. Nelnet acquired Great Lakes, which is significant because Great Lakes is one of the largest servicers according to the Department of Education.
It’s also worth noting that five of the above servicers are not-for-profits:
Although FedLoan’s parent organization, PHEAA, is a not-for-profit, FedLoan itself is actually for-profit.
As of June 2019, if we add up all outstanding loan data from the “Servicer Portfolio by Loan Status” spreadsheet, we can see that not-for-profits hold a tiny fraction of total outstanding debt – just over 9%. That is despite the fact that there are four for-profit servicers (and Nelnet acquired Great Lakes), but there are five not-for-profits.
|Servicer||Total Outstanding Debt ($billions)|
|PHEAA (FedLoan, AES)||$315.7|
If you think it seems as though the bulk of student loan debt is in a relatively small number of hands, you’d be correct in your assessment.
How Do I Find Out Who My Student Loan Servicer Is?
The quickest and easiest way to find out who your student loan servicer is would be to visit the National Student Loan Data System (NSLDS). Logging into the system requires you to have an FSA ID; normally, you create this when you initially apply for federal student aid.
If you have never created an FSA ID, there is a form to create one. You should only create one FSA ID for yourself, and you cannot create one on behalf of someone else.
As a note, it is common for student loans to change hands (more on that below). If that does happen with your student loans, you will only be notified if you have up-to-date contact information. Be sure you keep it up to date; otherwise, you could get a new servicer and not even be aware.
Can I Change My Student Loan Servicer?
Unfortunately, there is no way to change your federal student loan servicer directly. You cannot simply login to the NSLDS and say you want to change your servicer. The only way to change your servicer is to refinance with a private lender.
Refinancing with a Private Lender
When you refinance with a private lender, they will “buy out” your remaining student loan balance and issue a new student loan on their own terms. However, you should proceed with caution when going this route, primarily because you may give up some valuable borrower protections.
Indeed, despite the issues with federal student loan servicers, the loans themselves come with protections that private lenders may not offer.
For example, while some private student loan lenders will cancel your student debt in the unfortunate event of your death, not all of them will! With federal student loans, your student debt will automatically be canceled if that ever does happen.
Loans Can Be Sold To Other Servicers
There is one other way your servicer may change, and that is if your loans are sold. It is a common occurrence in the student loan industry for loans to change hands. Loans are packaged off and then sold between servicers.
That said, you don’t have any control over this process as a borrower. These sales include loans for many borrowers – not just yours.
Which Federal Student Loan Servicer is the Best?
For a number of reasons, it is difficult to say who the best federal student loan servicer is. As mentioned above, you generally cannot request a new student loan servicer.
Borrowers aren’t able to compare the different loan servicers, but let’s take a look at how many complaints each servicer has.
|Servicer||Total Complaints||Total Borrowers (Millions)||Borrowers per Complaint|
|PHEAA (FedLoan, AES)||10,222||6.85||670|
Note: Federal Student Aid does not issue data for each not-for-profit student loan servicer. We only have the totals for all not-for-profit servicers, which is what you see above.
Not-for-profits tend to have fewer complaints than for-profit student loan servicers in the CFPB’s Complaint Database. The servicer with the fewest complaints listed is OSLA, with only 45 complaints.
Navient has by far the most complaints, with over 30,000. This is despite the fact that they have the smallest portfolio of the for-profit federal student loan servicers.
Out of the not-for-profits, MOHELA has by far the most complaints, with 546.
Comparing The Number of Borrowers per Complaint
In looking at the last column from the above data, we can see that not-for-profit servicers fare the best. Higher numbers are better because that is the number of borrowers for which there is one complaint.
Think of it like this: for not-for-profits, one out of every 6,112 borrowers raises a complaint with the CFPB. For Navient, though, one out of every 174 borrowers raises a complaint. That’s quite a difference.
Needless to say, this makes not-for-profits look significantly more desirable. Notice that Great Lakes isn’t far behind, with one of every 4,380 borrowers raising a complaint with the CFPB.
However, remember that Nelnet acquired Great Lakes in 2018. We’d like to think that will make Great Lakes better, it’s tough to be entirely optimistic. Only time will tell how that acquisition will play out.
Out of the not-for-profits, MOHELA has by far the most complaints with 546.
To wrap up this section, not-for-profits seem to fare the best, but Great Lakes is not far behind (for now).
How Do I Contact My Federal Loan Servicer?
Since every federal student loan servicer is different, they may handle customer service differently. However, in the table below, you can see all of their phone numbers and links to their website.
|Servicer||Phone||Contact Hours (EST)|
|American Education Services (AES)||1-800-233-0557||Mon-Fri, 8:30 a.m. to 9:00 p.m.|
|CornerStone||1-800-663-1662||Mon-Thurs, 8:00 a.m. to 9:00 p.m.
Friday, 8:00 a.m. to 7:00 p.m.
|FedLoan||1-800-699-2908||Mon-Fri, 8:00 a.m. to 9:00 p.m.
TEACH Grant support: Mon-Fri, 8:00 a.m. to 9:00 p.m.
|Granite State||1-888-556-0022||Mon-Fri, 8:00 a.m. to 6:00 p.m.|
|Great Lakes||1-800-236-4300||Mon-Fri, 8:00 a.m. to 10:00 p.m|
|HESC/Edfinancial||1-855-337-6884||Mon-Thurs, 8:00 a.m. to 8:30 p.m.
Friday, 8:000 a.m. to 6:00 p.m.
|MOHELA||1-888-866-4352||Mon-Thurs, 8:00 a.m. to 10 p.m.
Friday, 8:00 a.m. to 6:00 p.m.
|Navient||1-800-722-1300||Mon-Thurs, 8:00 a.m. to 9:00 p.m.
Friday, 8:00 a.m. to 8:00 p.m.
|Nelnet||1-888-486-4722||Mon-Fri, 8:00 a.m. to 10:00 p.m.|
|OSLA||1-866-264-9762||Mon-Fri, 9:00 a.m. to 6:00 p.m.|
What You Should Know About Federal Student Loan Servicing
Due to our somewhat limited data, it is difficult to determine exactly which federal student loan servicer is best. We can see that OSLA has the fewest complaints, but we don’t know their total number of borrowers.
Great Lakes appears to have the best track record of the servicers for which we have complete data. However, Great Lakes was acquired by Nelnet.
Not-for-profit servicers appear to be rated better in general, despite not knowing how many borrowers they have.
Keep in mind though that you cannot change your servicer unless you refinance – or your student loans are sold to a different servicer.
Anyone who is considering refinancing should explore repayment options first, as refinancing with a private lender may mean giving up federal student loan protections.