(CTN News) – After a three-year epidemic break, a significant number of borrowers for college Student loans will start making repayments in October.
Changes in the loan servicing companies may make it more challenging for debtors not eligible for loan cancellation to resume their previously established schedule of regular monthly payments.
According to the Consumer Financial Protection Bureau, around 44 percent of borrowers with federal student loans who start making payments in October have switched to a different loan service provider.
Three companies providing loan servicing decided not to renew their contracts in 2021. Once they recommence regular payments, borrowers whose loans have been transferred to new service providers may encounter difficulties and make mistakes.
There is a chance that the loan balance and interest rate will be mistakenly reported to the credit bureaus, the payment status will be reported improperly, the credit bureaus will not receive information on all of the borrower’s payments, and the due dates will be moved.
Borrowers can identify their servicer, update contact information and see expected monthly payment amounts by logging into StudentAid.gov.
The Consumer Financial Protection Bureau alleged that Navient, a company formerly a subsidiary of Sallie Mae, “systematically and illegally failed borrowers at every stage of the repayment process.”
Following several legal challenges, the servicing company ended its agreement with the Education Department.
The current loan service providers for the Federal Student Aid (FSA) program are Great Lakes Educational Loan Services, Edfinancial, MOHELA, Advantage, Nelnet, OSLA Servicing, ECSI, and the Default Resolution Group.
Related CTN News: