Home Philatelic investment Student Loan Payments: How to Switch Service Providers

Student Loan Payments: How to Switch Service Providers


Kameleon007 / iStock.com

Every year, thousands of borrowers file complaints about their student loan officer with the Consumer Financial Protection Bureau (CFPB). According to the CFPB, “dealing with your loan servicer or lender” was one of the most cited reasons for filing a complaint in 2021.

Discover: Surprising things you can buy with food stamps
More: Top 10 richest people in the world

Among borrowers who have filed a complaint against their loan officer or lender, receiving poor information about their loan, having problems with how payments are processed, and problems with customer service are the top complaints.

Consolidate your federal student loan

If you have a federal student loan and want to switch service providers, consolidation is an option. When you consolidate your federal student loans, you get a new direct consolidation loan to pay off existing federal loans. Fox Business reports that consolidating can also result in lower monthly payments and flexible terms.

You can complete a consolidation loan application for your federal student loans at studentaid.gov.

Change student loan service on a private loan

If you have a student loan from a private lender, Fox Business noted that your lender is usually also your loan manager. To switch service providers on a private student loan, you will need to switch lenders.

By refinancing your private student loan, you can take out a new private loan from another provider to pay off your existing loan. However, to qualify for student loan refinance, you will need good or excellent credit.

See: Why inflation makes your paycheck worth less
Find: How do I get student loan forgiveness? PSLF derogations and more

Refinancing also allows borrowers to choose new repayment terms and possibly lower their interest rates. This allows borrowers to pay less each month, save money on interest, or both.

More from GOBankingRates

About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based in Ohio where she attended Ohio State University and lives with her two toddlers and her fiancé. His work has appeared in print and online publications such as Fox Business and Scotsman Guide.