Last year, the Department of Education awarded new student loan servicing contracts to five companies: CRI, EdFinancial Services, Maximus Education, LLC, MOHELA, and Nelnet. The goal of the changes is to improve student loan servicing, provide better customer service to borrowers, and hold servicers more accountable for their mistakes. The changes will go live this spring. NCLC released a report today analyzing the changes and the potential impact on student loan borrowers’ rights and experiences.
While some of the changes will be straightforward to implement, there are a number of changes that are murkier and more complex. NCLC will be monitoring how the Department implements and oversees these changes.
The new contracts include changes that NCLC has been advocating for to improve how loans are serviced, such as:
- new standards to evaluate servicers based on the quality of service they provide to borrowers;
- new compensation and financial incentives for servicers based on how effective they are at helping borrowers avoid delinquency and default;
- changes to how special types of loans are serviced, such as borrowers seeking PSLF and Total & Permanent Disability discharges; and
- creating a single entry point through studentaid.gov where borrowers can manage their loans.
These changes will hopefully result in big improvements for borrowers, but there will be challenges in the process.
If you have problems with your loan servicer, share your story with NCLC to help make the student loan system work.
