Can I Transfer My Student Loans to a Different Servicer?

Two way road.

Flickr user Xava du

Many students are unaware of this and are caught by surprise when their federal student loans get transferred to a different servicer.

So why would a loan get transferred?

All federal student loans are handled by different third-party loan servicers. If the loan servicer decides to sell their portfolio or there is some other change in their management, your loan gets transferred to the new servicer.

What changes with your loan?

While the terms of the loan will essentially remain unchanged, there may be subtle differences that you should be aware of. For example your earlier servicer may have accepted credit card payments but the new management may decide against it. They may require all payments to be made via direct transfers. Also, if you have been making your payments through automatic debit, this will not transfer automatically to the new servicer. You will have to submit a fresh application to the bank with the new details.

Notifications about loan transfers

You should receive a notification informing you about the transfer and any updates that come into effect, which is why it is important to read all mail you receive from your loan servicer. Ignoring any mail could result in missed payments and late fees, which would be considered your responsibility.

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Lender Rates (APR) Eligibility
Earnest company logo.
Variable APR: 1.99%* +
Fixed APR: 2.98%* +
Undergraduate and Graduate
Lendkey company logo.
Variable APR: 1.90%* +
Fixed APR: 2.95%* +
Undergraduate, Graduate, Parent PLUS
Credible company logo.
Variable APR: 2.13%* +
Fixed APR: 2.58%* +
Undergraduate and Graduate
Laurel road company logo.
Variable APR: 1.89%* +
Fixed APR: 2.50%* +
Undergraduate and Graduate
Commonbond company logo.
Variable APR: 2.46%* +
Fixed APR: 2.59%* +
Undergraduate, Graduate, Parent PLUS
Fixed APR: 2.74%* +
Undergraduate, Graduate, Parent PLUS
VISIT ISL Education Lending
Variable APR: 1.95%* +
Fixed APR: 2.55%* +
Undergraduate, Graduate, Parent PLUS
VISIT Nelnet
Variable APR: 2.94%* +
Fixed APR: 2.99%* +
Undergraduate and Graduate
VISIT College Ave
Variable APR: 2.39%* +
Fixed APR: 2.58%* +
Undergraduate and Graduate, Parent PLUS

*APR includes a 0.25% interest rate reduction for enrollment in automatic payments.

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