• Education

    My student loan servicer changed without my knowing. It may happen to you, too — here’s what to do

    AnyFans Posted on

    By Annie Nova

    Copyright cnbc

    My student loan servicer changed without my knowing. It may happen to you, too — here's what to do

    At first, I thought it was another scam.

    A company I’d never heard of sent me an email on Aug. 15 notifying me that it is my new student loan servicer. It was the first I was hearing of the change. Since I finished graduate school in 2017, my servicer has been Nelnet.

    “The U.S. Department of Education (ED) authorized the transfer of your federal student loan(s) from Nelnet to CRI,” the message said.

    I searched through my emails to see if I’d missed a message about the transfer of my loans, but I couldn’t find one. Finally, I realized that I had received notice of the upcoming change in my Nelnet account inbox (which I don’t remember ever checking). The letter was posted in mid-July.

    After I created a new account with CRI, or Central Research, Inc., as the message instructed me to do, I panicked when I saw that my loans had been placed in an administrative forbearance. I’d never requested that my loan payments be put on pause, and I’ve written extensively about how costly these reprieves can be, thanks to the accrual of interest.

    I couldn’t figure out how long my loans were in that status, and why my next due date wasn’t until the end of October.

    More from Personal Finance:How to get a better mortgage rate as the 30-year fixed nears 1-year lowHere’s how to handle your student loans after losing a jobGold is on a record run — here’s how to invest

    Other borrowers are also reporting their student debt has recently been transferred, with similar headaches, said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.

    “CRI is a relatively new servicer, and it seems that ED is slowly transferring accounts from other servicers to them,” Nierman told me.

    The U.S. Department of Education contracts with different companies to service its over $1.6 trillion federal student loan portfolio, including Mohela, Nelnet and EdFinancial. It pays the servicers more than $1 billion a year to manage roughly 42 million borrowers’ accounts, according to higher education expert Mark Kantrowitz.

    I spoke to experts about what borrowers — me included — should know and do if their federal student loans are transferred from one company to another.

    The U.S. Department of Education, Nelnet and CRI did not respond to a request for comment.

    You Might Also Like