by the Consumer Financial Protection Bureau , over 40% of borrowers will have a different loan servicer than the one they had prior to the student loan pause going into effect.
Some of the biggest shifts involve the departure of FedLoan Servicing, which transferred accounts to EdFinancial, MOHELA, and other loan servicers, as well as Navient, which transferred its Education Department accounts to Aidvantage. Great Lakes Higher Education has also been transferring its department portfolio to Nelnet.
Student loan servicers play critical roles. They accept payments, review repayment plan requests, process forms and paperwork, and answer borrowers’ questions. Advocates have warned that given the changes to loan servicing as well as financial constraints, the Education Department’s student loan servicing may buckle under the strain of millions of borrowers simultaneously resuming repayment.
based on income . According to the most recent proposal, the plan could reduce some borrowers’ monthly payments by 50% or more, and accelerate student loan forgiveness. The plan has not been finalized yet, however. And it will not be fully available when payments resume later this summer. However, the Education Department is expected to release updated proposed regulations in the coming months, and may start phasing in certain elements of the plan later this year or in 2024. This would give borrowers a potential new path to more affordable payments after the student loan pause ends.
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