Many student loan borrowers apply for federal loans first and may also get private loans to help cover college costs. Federal loans are issued by the U.S. government and often have lower interest rates than private loans, which borrowers get from private lenders such as banks and credit unions.
When you begin repaying your loans, you’ll send payments to a loan servicer. You won’t choose your initial student loan servicer, but it’s possible to switch federal and private loan servicers if you encounter difficulties.
Here’s what to know about changing loan servicers, how it works, and what to expect when selecting a new servicer.
In this guide:
- Can I change my federal student loan servicer?
- Can I change my private student loan servicer?
- Can I change student loan servicers without changing any other loan terms?
Can I change my federal student loan servicer?
Your federal loan servicer manages the day-to-day aspects of your loan on behalf of the U.S. Department of Education. It may process payments or work with you to change your repayment plan.
If you have federal loans, log in to your online dashboard or call 1-800-4-FED-AID to check which servicer you have. To determine your loan servicer for private loans, you’ll need to speak with your lender.
You can change your federal loan servicer, but you’ll want to ensure you’re switching to another federal loan servicer. If you switch to a private servicer, you could lose benefits associated with your federal loans, including the potential for student loan forgiveness.
Here’s a list of federal loan servicers you can switch to for 2023:
- Aidvantage: 1-800-722-1300
- MOHELA: 1-800-722-1300
- HESC/EdFinancial: 1-800-722-1300
- OSLA Servicing: 1-800-722-1300
- Nelnet: 1-866-426-6765
How to change federal loan servicers
To change your federal loan servicer, you can take out a Direct Consolidation Loan. Direct Consolidation Loans allow you to consolidate multiple federal loans into one. This could result in a new interest rate, longer repayment term, or simplified monthly payments.
You can apply online for a Direct Consolidation Loan through the Federal Student Aid website, where you can choose a new loan servicer.
You can also complete a paper application instead and send it to your preferred federal loan servicer.
Can I change my private student loan servicer?
Changing your private student loan servicer is possible if you’re unhappy with your current servicer. But you’ll need to do so with another private lender because consolidating your private loans into a federal loan isn’t an option.
How to change private loan servicers
You can change private loan servicers by refinancing your private loans with another lender. When you refinance private student loans, you may be able to choose a different term or qualify for a lower interest rate.
Several banks and credit unions can help you refinance your private student loans, so comparing options to find a favorable loan term and interest rate is essential.
As you shop around, also look at each lender’s customer service options. An accessible customer service team is helpful if you have questions about your loan.
Can I change student loan servicers without changing any other loan terms?
You won’t be able to change your student loan servicer without consolidating or refinancing your existing loans. However, if you’re refinancing existing private student loans with a new loan, you could opt for one that offers a similar term or rate.
In general, your new loan will likely differ from your original one. This is true whether you’re consolidating federal student loans or refinancing private student loans. You’ll have a different servicer, and you may also have a longer or shorter loan term, a lower or higher rate, and a different monthly payment.
If you have federal loans and are considering consolidating because of service issues, you may want to stick it out with your current service provider for now. Issues with the current system have been widely recognized, and there are plans to replace it and launch a more unified system in 2024.
If you have private student loans, comparing private lenders can help you find the best student loan refinance for your situation.