Posted Date:October 18, 2013
| Author: | Jana Hernandes, Service Director, Operations, Federal Student Aid |
Subject: Loan Servicing Information - Federally-Owned Loan Transfer Initiative Planned for October 2013 - March 2014
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. Now that we have transferred all Direct Loan accounts from the Direct Loan Servicing Center (ACS) to other members of our federal loan servicer team, we are re-starting our evaluation of borrowers whose accounts are assigned to two or more servicers. Our goal is to transfer the accounts as necessary to ensure that each affected borrower has only one servicer for all of his or her federally-owned loans.
The new transfer initiative has begun and will continue on an ongoing basis through March 2014. After we complete this initiative, we will monitor borrower account assignments on a regular basis and resolve situations in which accounts are assigned to two or more members of our federal loan servicer team.
Our plan for the October 2013 – March 2014 transfer initiative is as follows:
October – December 2013
During the October – December 2013 timeframe, we plan to transfer the accounts of borrowers whose federally-owned loans are split across FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and/or Sallie Mae.
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In October 2013, we will transfer borrower accounts from Great Lakes Educational Loan Services, Inc. and Nelnet to the other servicers. These transfers will conclude in early November 2013.
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In late November 2013, we will transfer borrower accounts from FedLoan Servicing (PHEAA) and Sallie Mae to the other servicers. These transfers will conclude in mid December 2013.
Note: We will determine the servicer to which a borrower’s account (or accounts) will be transferred—FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, or Sallie Mae—based on the number of federally-owned loans each servicer services for the borrower or, if the number of loans is equal across servicers, the total dollar amount of the loans. The borrower’s accounts will be transferred to the servicer that services the most loans or the highest total dollar amount.
January – March 2014
During the January – March 2014 timeframe, we plan to transfer the accounts of borrowers whose federally-owned loans are split across a Not-For-Profit (NFP) member of our federal loan servicer team and FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, Sallie Mae, and/or another NFP servicer.
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In late January 2014, we will transfer borrower accounts from MOHELA and CornerStone to the other servicers. These transfers will conclude in early February 2014.
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In mid February 2014, we will transfer borrower accounts from ESA/Edfinancial, Granite State – GSMR, Aspire Resources Inc, OSLA Servicing, and VSAC Federal Loans to the other servicers. These transfers will conclude in early March 2014.
Note: If one of a borrower’s accounts is assigned to FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, or Sallie Mae, we will transfer the borrower’s other account (or accounts) to the servicer within that group that services the most federally-owned loans or the highest dollar amount for the borrower. If all of the borrower’s accounts are assigned to NFP servicers, we will determine the NFP servicer to which a borrower’s account (or accounts) will be transferred based on the number of federally-owned loans each NFP servicer services for the borrower or, if the number of loans is equal across NFP servicers, the total dollar amount of the loans. The borrower’s accounts will be transferred to the NFP servicer that services the most loans or the highest total dollar amount.
In our efforts to manage the ever-growing portfolio of federally-owned loans as efficiently and effectively as possible, 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 “Federally-Owned Loan Transfers – Current Servicer to New Servicer,” we provide key information about the transfer process in question and answer format.
Contact Information
We appreciate the community’s ongoing support of our approach to servicing federally-owned loans. If you have questions about the initiative 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.