Last month the federal government announced that it was terminating the contract of one loan servicer (ACS) and transferring the loans to a number of different companies. A couple weeks later, they announced that a number of other servicers will be transferred. (A loan servicer is a company that collects student loan bills on behalf of the federal government)
What does this mean for you?
Unfortunately, it is probably not good news. You will need to be diligent with making sure that you get credit for all payments submitted. You will also need to make sure that the new company has accurate records.
In theory this should be an easy transfer of information, but as I have personally learned, sometimes errors are made. You can’t prevent an error, but you can make sure that an error doesn’t cost you any money.
It’s not clear exactly how many borrowers will be affected by these transfers, but you can be sure that some people may try to take advantage of this situation. Make sure that you don’t let yourself be a victim.
Just because your loan is being transferred, doesn’t mean the bill you received is legit. Fortunately, there is a resource to verify exactly where all of your federal government loans are. Log on to http://www.nslds.ed.gov to verify exactly who is servicing your federal loans. If someone sends you a bill and they are not on this list, you will need to do some investigating. All legitimate lenders know they should appear on nslds, and finding out who is there and who isn’t is quite easy.
Don’t pay anyone to “help avoid the transfer”. The contracts of some servicers are ending and others are beginning. It sucks, but there is nothing you can do about. Don’t let anyone talk you into any service that will “help” you with this process. It would be a waste of your money… don’t let someone use this situation as an opportunity to take advantage of you.
This transfer should not under any circumstances cost you any money!
If you are wondering if you will be affected by this transfer…
What debt is going where?
If you were getting student loan bills from a company called ACS, they will now come from a number of different loan servicers.
If you had COSTEP, EDGEucation Loans, or EdManage; your loans will be transferred to MOHELA.
If you had KSA Servicing, your loans will be transferred to Aspire Resources Inc.
The Good News?
If there is any good news to be taken from these announcements, it is the end of the ACS contract with the federal government. Before I consolidated my federal loans, ACS handled a couple of my student loans. Their customer “service” people made Sallie Mae look like the red carpet treatment. When you called their call center, if you could hear over the static, you not only heard the person you were talking to, but the people sitting next to them as well.
I know I am as guilty as anyone of assuming that any unexpected student loan change will be for the worst, but getting rid of ACS is probably for the best.
Have you ever had your loans transferred? Do you have any suggestions for those affected by the latest round of student loan transfers?