Dealing with an unresponsive or otherwise difficult loan servicer can be frustrating. The good news is that you’re not necessarily stuck with the servicer you’ve been assigned to. You can change student loan servicers through consolidation or refinancing — though both of these options come with some trade-offs.

Reasons to change your student loan servicer

A common reason borrowers want to switch loan servicers is poor customer service. This may include having trouble reaching a representative or receiving incorrect or confusing information.

But student loan expert Mark Kantrowitz, author of “How to Appeal for More College Financial Aid,” says that borrowers usually won’t solve their problems by changing providers.

“The loan servicers have similar performance, and borrower complaints may have more to do with the design of the loan program and the limits on the servicer’s authority, as opposed to the servicer being mean or incompetent,” he says.

Still, if you’ve repeatedly had bad experiences with your servicer and are considering consolidating or refinancing your loans anyway, switching servicers may not be a bad idea.

How to change your student loan servicer

There are only a few different ways to change your student loan servicer.

Direct Loan Consolidation

Borrowers who are unhappy with their federal loan servicer but want to maintain their federal student loan status can consolidate their federal loans into a Direct Consolidation Loan. When you consolidate through the official federal program, you’ll have the option of choosing a loan servicer.

Your current options are:

  • Aidvantage
  • Edfinancial
  • Nelnet
  • OSLA Servicing

The downside of consolidating is that you may lose credit for any payments made toward an income-driven repayment plan. If you’ve already made payments toward that program, it’s likely better to keep your current loan servicer and not consolidate. It’s also worth noting that your interest rate will be the weighted average of all loans you’re consolidating, so you may pay more in interest on your loans if you end up on a longer repayment plan.


The other way to change your loan servicer is by refinancing your student loans. When you refinance federal student loans, those loans become private. You’ll lose all federal benefits, including loan forgiveness programs, income-driven repayment plans and extended deferment and forbearance.

You can also refinance private loans with a different private lender. Refinancing gives you more options than consolidation because you can choose from any lender you want and pick a different term. Most borrowers refinance to get a lower interest rate, which can save them hundreds or even thousands of dollars in interest over the life of the loan.

Can your student loans be sold to another lender?

If you have federal student loans, Federal Student Aid (FSA) may transfer your loans to a new servicer. You will likely receive an email or letter before or after this happens. Private student loans can also be sold to new servicers, but you’ll be notified of this change.

When the transfer occurs, you may need to set up your payment information all over again. If you had automatic payments set up with your previous lender, you’ll likely need to reenroll with the new loan servicer. You may have to complete some extra steps to relink your payment information to the account.

How student loan servicers are changing in 2023

The Department of Education has been improving student loan servicing to deliver what it calls “a 21st-century customer experience.” This ongoing effort is known as Unified Servicing and Data Solution (USDS).

Currently, six companies service federal student loans, each operating a website, contact center and training programs for staff. The result is a disjointed system for borrowers and one often plagued by conflicting or confusing information. In addition, the lack of consistency throughout the system has often resulted in borrowers missing out on repayment options.

At the end of 2023, the contracts for the current servicers are set to expire. The Department of Education is working on establishing a new servicing system before then, one that’s more helpful for borrowers, transparent and easier to navigate.

The upcoming changes will include providing all federally managed borrowers with complete account management capabilities on, as well as increased servicer accountability metrics, particularly regarding reducing loan delinquencies, defaults and other customer service goals.

Also, as part of the changes in recent years, three servicers exited the federal student loan servicing business altogether. FedLoan Servicing, Granite State, and Navient all ended their contracts. Loans serviced by these companies were transferred to the remaining servicers.

What to do if your loan servicer changed

If you had student loans with one of the servicing companies that left the industry over the past year and have been switched to a new servicer, or if your servicer sold your loans to a different company, it’s still important to keep all of your previous statements, tax forms and other documents. Store these on the cloud where you can easily access them.

Maintaining this information is important to ensure you have documentation about the history of your loan payments and that all information about your loan balance remains correct moving forward.

If you’re not satisfied with your new loan servicer, loan consolidation may be the best move to access a new servicer. You can also file a complaint with the Department of Education.

Bottom line

It is possible to change your student loan servicer if you’re unhappy with the current company. Direct consolidation of your loans or refinancing altogether are some of the ways to obtain a new servicer. However, when you refinance federal student loans with a private lender, you will lose important benefits such as income-driven repayment and loan forgiveness.

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