Posted Date:November 9, 2012
|Author:||Jana Hernandes, Service Director, Operations, Federal Student Aid|
Subject: Loan Servicing Information - Federally-Owned Loan Initiatives Planned for November and December 2012
We continue our efforts to improve the servicing of 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. A key aspect of our ongoing work is to manage the ever-growing portfolio of federally-owned loans as efficiently and effectively as possible. To this end, we are implementing two initiatives in November and December 2012 that will assist us in addressing overall portfolio management needs.
- Assignment of Newly-Made Traditional Direct Consolidation Loans to FedLoan Servicing (PHEAA) and Sallie Mae for Servicing – This initiative will affect borrowers whose traditional Direct Consolidation Loans are made on or after November 5, 2012. Through this initiative, we will assign all newly-made traditional consolidation loans to one of two federal loan servicers – FedLoan Servicing (PHEAA) and Sallie Mae – for servicing on our behalf. Upon assignment of a borrower's newly-made traditional consolidation loan, FedLoan Servicing (PHEAA) or Sallie Mae will correspond directly with the borrower.
- Transfer of Federally-Owned Loans with Direct Loan Servicing Center (ACS) in In-School or In-School Deferment Status – This transfer initiative will affect borrowers whose Direct Loans assigned to the Direct Loan Servicing Center (ACS) are in an in-school or in-school deferment status. Through this initiative, we will transfer an affected borrower's Direct Loans that are currently assigned to the Direct Loan Servicing Center (ACS) to a new servicer – FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, or Sallie Mae.
Note: This traditional consolidation loan servicing assignment initiative does not apply to consolidation loans that were made earlier this year through the Special Direct Consolidation Loan initiative. In general, Special Direct Consolidation Loans are serviced by the federal loan servicer that completed the consolidation.
This initiative will begin November 13, 2012 and continue through December 2012. We have continuously refined and improved the transfer process so that each transfer is executed in a manner that is as orderly and smooth as possible for the affected borrowers. In the attachment to this announcement titled "Direct Loan Transfers – Direct Loan Servicing Center (ACS) to New Servicer," we provide key information about the transfer process in question and answer format.
We appreciate the community's ongoing support of our approach to servicing federally-owned loans. If you have questions about the initiatives explained in this announcement, contact the new federal loan servicer directly. Contact information for the appropriate servicer can be found on the Loan Servicing Centers for Schools Contact Information page on the IFAP Web site.