ORLANDO, Fla. - Student loans can change hands in what seems like a blink of an eye – and it's allowed to be that way.
You could even be one of the upwards of 16 million people who will likely have a new loan service provider by the end of the year.
Student Loan Consultants say there are some things you should do before your loan changes hands.
"There's a lot going on with student loans right now. You haven't had to pay," said Melissa Maguire, a certified student loan specialist. "All of a sudden you're getting letters that you have a new servicer. So people might be confused."
At least three major student loan servicers announced to borrowers that they will no longer handle their federal student loans next year. The companies are:
- Pennsylvania Higher Education Assistance Agency under FedLoan Servicing
- Granite State Management and Resources
Navient sent an email to about 6 million of its borrowers at the end of October. The email alerted customers that the transition to servicer Aidvantage has started. The email noted the switch should not impact your loan repayment plan, interest rates, or balance. The company released this statement to borrowers: 'Navient, Maximus Announce Proposal to Transfer Federal Student Loan Servicing Contract, Pending Government Approval | Navient Corporation'.
Student loan consultants said that even though the process is designed to be a seamless, hands-off switch, you definitely want to log your current information.
"Take a look at your payment history and account history," said Maguire. "Take snapshots of outstanding loan balance today."
It's also suggested you double-check your contact information included on your current account so your new provider knows how to get in touch with you.
Student Loan Consultants said it is important to have that documentation just in case your balance numbers mistakenly change during the transition process and you'll have a way to prove your account history.
Consultants added that these changes come in response to the Department of Education’s efforts to streamline services for borrowers. It is also from efforts in Washington to create more compliance from loan companies. For example, FedLoan was sued in the last two years. The company allegedly prevented public servants from having their student loans forgiven or reduced.
The State Department of Education released a statement to borrowers about the upcoming changes: ‘Statement From Federal Student Aid Chief Operating Officer Rich Cordray Regarding Loan Servicer Contracts | U.S. Department of Education’.
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