Posted Date:September 23, 2011
| Author: | Jana Hernandes, Service Director, Operations, Federal Student Aid |
Subject: Loan Servicing Information - New Servicers Join Federal Loan Servicer Team October 2011 - January 2013
In September 2009, Federal Student Aid expanded its federal loan servicer team to provide additional servicing capacity for Title IV loans owned by the Department of Education (the Department). These loans include, but are not limited to, William D. Ford Federal Direct Loan (Direct Loan) Program loans and Federal Family Education Loan (FFEL) Purchased Loans, more simply referred to as federally-owned loans. Since that time, six servicers—Department of Education Student Loan Servicing Center (ACS), Direct Loan Servicing Center (ACS), FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae—have comprised the federal loan servicer team.
As our federally-owned loan portfolio continues to grow, we are ready to move to the next step in ensuring an efficient and effective multi-servicer, borrower-centric approach to servicing. We will further expand our federal loan servicer team through contracts awarded under the HCERA/SAFRA Not-For-Profit (NFP) Servicer Program solicitation. This solicitation offered NFP entities the opportunity to submit proposals individually or in teams for servicing borrower accounts on our behalf. Whether individual or team award, our customers will know and face one servicer. The Department will annually measure each servicer’s performance in the areas of borrower satisfaction and default management and use the results to assign additional volume when applicable.
New Federal Loan Servicer Awards and Implementation
Currently, we anticipate the award of 15 new federal loan servicing contracts from October 2011 through January 2013. The new servicers and their anticipated implementation dates are as follows:
Servicer | Anticipated Implementation |
MOHELA | October 2011 |
ESA/Edfinancial | January 2012 |
Cornerstone | January 2012 |
Aspire | April 2012 |
Granite State (NH) | April 2012 |
EdManage | April 2012 |
OSLA | July 2012 |
Tru Student, Inc. | July 2012 |
Kentucky Higher Education Student Loan Corporation | October 2012 |
College Foundation, Inc. | October 2012 |
Council for South Texas Economic Progress (COSTEP) | October 2012 |
Vermont Student Assistance Corporation | October 2012 |
Georgia Student Finance Authority | January 2013 |
Brazos | January 2013 |
New Mexico | January 2013 |
Initially, the 15 new servicers will be assigned existing Direct Loan borrower accounts. We will inform the community of each new servicer’s implementation through an Electronic Announcement on the Information for Financial Aid Professionals (IFAP) Web site. In addition to providing the Servicer Name, National Student Loan Data System (NSLDS) Name, and NSLDS ED Servicer Code, we will provide general information about the transfer of borrower accounts to that servicer. As is true whenever we transfer a student or parent borrower’s federally-owned loans, the receiving servicer will correspond with the borrower after the transferred loans have been fully loaded to its system.
Forthcoming Announcements
Please monitor the IFAP Web site for our announcement of each new servicer’s implementation. The subject of these Electronic Announcements will begin with the words “Loan Servicing Information” as does this one.
We understand that the addition of new servicers to our federal loan servicing team will result in challenges that accompany growth and change. We have appreciated the community’s support and patience over the past two years as we implemented a multi-servicer, borrower-centric approach to servicing and ask again for that same understanding as we work to serve borrowers as wholly and efficiently as possible. Together with our servicing team, we remain committed to providing superior customer service to borrower and school customers through each of our highly-qualified federal loan servicers.