What to Do If Your Student Loans Were Sold to Another Company

If you’ve borrowed student loans to pay for college, your loan may be transferred or sold to a new servicer or lender during its term. This is true if you have federal or private student loans. Federal loans can only be transferred and not sold, but private student loans could be sold. 

If this happens to your student loans, your original loan terms, rates, balance, payments, and other loan details should remain the same. Some things might change, though, so here’s what to know if you end up in this situation. 

What should I do if my student loan was sold to another company? 

You can’t prevent your loan from being sold or transferred to a new student loan servicer or lender. Unfortunately, this is relatively common, and while it can be inconvenient initially, your loan details won’t change. So you can rest assured that any inconvenience will be temporary. 

Here’s what you can expect if this happens to you:

1. You should receive a letter about the change

Before your student loan is sold to another company, your original loan servicer or lender will inform you of the upcoming change. 

At least two weeks before the change occurs, you’ll receive a letter detailing your new loan servicer’s name, address, and phone number. Retain this letter for your records; you’ll likely need it to set up new payments. 

2. The loan will be transferred—and your balance may go to $0

During the loan transfer, you might notice your original loan balance shows as paid off in your existing account. This can be surprising, but it’s normal. 

The balance will eventually appear in your account with your new servicer or lender, but it can take up to six weeks for everything to move over—including your full payment history. In the meantime, you’ll want to continue sending payments to your old servicer.

3. Your new lender or servicer will contact you

You should receive a follow-up letter from your new loan servicer or lender. This letter will provide information about your new account, your new lender’s contact information, and how to access your account online. It may also detail setting up autopay or making new payments. 

4. Confirm everything is correct once the transfer is complete

During the loan transfer process, keeping detailed records of your account information is essential. Download your most recent statement from your original loan servicer to have your loan balance, repayment plan information, interest rate, and monthly payment amount handy. 

If you’re currently in forbearance or deferment on your federal student loans, be prepared to share details about your payment pause with your new servicer. 

Your information should transfer correctly once the process is complete, but you’ll want to double-check everything to be sure there are no mistakes. 

What can change when my student loan is sold to another company? 

Your loan balance, interest rate, loan term, and monthly payment amount should remain the same even if your student loan is sold to a new company. 

Likewise, if your loan is transferred from one federal loan servicer to another, your repayment plan and forbearance or deferment status shouldn’t change either. 

Some things can change, though, including the following details:

• Loan servicer contact information, including their name and phone number
• Payment address and website
• Your online account login credentials

If you notice that your original loan details have changed during the transfer process, contacting your original and new loan servicers or lenders immediately is important. This will help you rectify the situation promptly so you don’t end up behind on payments due to a mistake. 

How to contact your new student loan servicer

Your new student loan servicer should send you a letter to notify you of the upcoming change. This letter should provide detailed information about how to set up your new account online, make student loan payments, set up autopay, and more. 

If you do not receive this letter, contact your original loan servicer. You’ll need this information to begin making your payments with the new servicer. 

If you received a letter from your new loan servicer and have questions, call the number listed on your letter to speak with a loan services representative. They should be able to assist you with any concerns. 

How to manage payments if your student loan was sold to another company 

The payment process can differ when your loan is sold to another company. Here are some items to keep in mind to ensure you manage your payments appropriately:

• Re-establish autopay. If you had autopay or your bank account information saved in your old loan account, this information probably won’t transfer to your new servicer or lender. You can confirm this by logging into your new loan account. Be prepared to re-enter your bank account information for future monthly payments. 
• Continue making on-time payments. During the transfer process, you’ll want to continue sending payments to your old servicer, but once the transfer is complete, you’ll begin sending monthly payments to your new servicer. Accidentally sending a payment to the wrong servicer could result in late payments, negatively impacting your credit score. If you have payment questions, contact your original loan servicer for clarification. 
• Contact new and former servicers and lenders with questions. Again, you should contact your new and former loan servicers to resolve any issues with your loan balance, payment history, interest rate, or repayment plan. The sale and transfer of loans are fairly common, so you should be able to resolve any issues easily.   

Know your legal rights and protections 

By law, your original loan servicer or lender must inform you that your loan is being sold or transferred. It, or your new servicer, must provide new contact information so you can set up payments with your new servicer. 

If you encounter any issues with a loan transfer that aren’t easily resolved, you also have some recourse:

• If you have federal student loans, you can file a complaint with the Federal Student Aid Ombudsman Group, the arm of the U.S. Department of Education that handles these issues. It can provide support as you work toward a resolution with your new lender. 
• If you have private student loans, you can file a complaint online with the Consumer Financial Protection Bureau (CFPB) or call it directly at (855) 411-CFPB (2372). It will offer guidance on handling the situation best and resolving any issues. 

FAQ

What does it mean when my student loan is sold to another company?

When your student loan is sold to another company, a new lender or servicer will manage your loan. Your previous lender has transferred the rights to service your loan to another entity. This is a common practice in the student loan industry and does not affect the terms or balance of your loan.

Will the interest rate or terms of my loan change after it’s sold?

No, your loan’s interest rate and terms will not change when sold to a new company. Federal law requires the new servicer to honor the original loan agreement. This includes your interest rate, repayment terms, and balance.

What should I do if I don’t receive any communication from the new servicer?

If you don’t receive any communication from the new servicer, contact your previous loan servicer to confirm the transfer details. Ensure you gather the new servicer’s contact information. You can contact the Consumer Financial Protection Bureau for assistance if issues persist.

How can I make sure my payments are credited correctly during the transition?

During the transition, keep detailed records of all payments you make and monitor your loan account statements. Verify that your payments are credited to your account correctly and on time. Contact the new servicer if you notice discrepancies.

What if I have issues with my new loan servicer?

If you encounter issues with your new loan servicer, communicate your concerns. Document all interactions, and keep copies of any correspondences. If the issues are not resolved, you may file a complaint with the Consumer Financial Protection Bureau.

Who can I contact if I have a dispute with my new loan servicer?

If you have a dispute with your new loan servicer, first attempt to resolve it through the servicer’s customer service department. If you are unsatisfied with the resolution, contact the Federal Student Aid Ombudsman Group, which helps resolve disputes related to federal student loans.

If I’m unhappy, can I switch to a different loan servicer?

Switching loan servicers is not typically an option unless you consolidate your federal student loans or refinance through a private student loan company. Evaluate the benefits and potential drawbacks before making such decisions. They could affect your loan terms and benefits.