Fedloan Servicing has announced that it will cease providing Federal Student Loan services when its current contract expires.
In the coming months, we will transfer the federal student loans currently held by FedLoan Servicing to a different servicer. This change will not affect existing loan terms, conditions, interest rates, cancellation or forgiveness programs, or repayment plans available for loans. Nor will it change the temporary suspension of payments and the 0% interest benefits that borrowers are currently receiving due to the coronavirus emergency.
In the coming months, we will be transferring the federal student loans currently held by FedLone Servicing to another service provider. This change will not affect existing terms, conditions, interest rates, loan discharge or waiver programs, or available loan repayment plans. It also will not change the temporary payment suspension and 0% interest benefits borrowers are currently receiving due to the coronavirus emergency.
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What company took over FedLoan?
The Pennsylvania Higher Education Support Authority (PHEAA), which serves as FedLoan servicing for its Department of Education's servicing operations, announced earlier this year that it would withdraw from the government's federal student loan servicing system if the agreement expires in December.
What is happening to FedLoan servicing?
FedLoan announced its withdrawal from the department's loan servicing system last year and its contract was due to expire in December. However, FedLoan and the department have reached an agreement to extend the contract for another year to allow a smooth transition to new loan service providers.
Update as of Dec. 22, 2021
We continue to transfer loans from FedLoan Servicing to MOHELA, Aidvantage (previously serviced by Naviant), Edfinancial, and Nelnet.
If you have not received notice from us, FedLoan servicing or your new service provider by the end of 2021, your debt is still with FedLoan servicing.
We further determine that the MOHELA will be a future service provider for borrowers in the Public Service Loan Forwardness (PSLF) Program and the Teacher Education Support Assistance for College and Higher Education (TEACH) grant program. All borrowers enrolled in PSLF and all TEACH grant recipients will remain with the FedLoan service until 2022 after transfer to MOHELA.
We'll give further details on this runner as transfers continue throughout 2022.
Update as of Oct. 18, 2021
In addition to ongoing transfers to MOHELA, we will soon begin transferring a group of FedLoan service providers to Navient, Edfinancial, and Nelnet. If you are an affected borrower, see the notifications from us and FedLoan servicing for more information on this transfer. Be sure to read these notifications in full to understand who your new loan service provider will be.
In addition, once the transfer is complete you can expect notice from us and from Navient, Edfinancial or Nelnet. Be sure to read these notifications as well. This transfer is expected to continue next year.
Update as of Sept. 29, 2021
We will soon begin transferring some groups of FedLoan service providers to MOHELA. If you are an affected borrower, see the notifications from us and FedLoan servicing for more information on this transfer. Be sure to read these notifications in full.
In addition, once the transfer is complete you can expect notice from us and MOHELA. Be sure to read these notifications as well.
The transfer of borrowers from FedLoan servicing to MOHELA and other providers (who will be determined and announced later) is expected to continue over the next year.