Posted Date:July 21, 2016
|Author:||John Brooks, Service Director, Operations, Federal Student Aid|
Subject: Loan Servicing Information - Federal Loan Servicer Team Change
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. In this announcement, we inform the community of an upcoming change to our federal loan servicer team.
One Not-for-Profit (NFP) servicer—VSAC Federal Loans—is ceasing operations as a vendor in the federal student loan servicing team. This action is being undertaken at VSAC Federal Loans’ request and is not related to its performance as a federal servicer. Federally held loan accounts currently assigned to VSAC Federal Loans will be transferred to Nelnet, one of our Title IV Additional Servicers (TIVAS).
The transfer of Direct Loan accounts from VSAC Federal Loans to Nelnet will occur in several groups in August 2016. All affected borrowers will be informed of the servicer change before and after the transfers occur.
The Web site addresses, phone numbers, and e-mail addresses for VSAC Federal Loans will remain operational until we transfer all Direct Loan accounts to Nelnet. Once the transfers are completed, VSAC Federal Loans’ Web site addresses will remain active and phone numbers and e-mail addresses will be redirected to Nelnet for a period of time. We will inform the community of the closure and decommissioning dates through a subsequent Electronic Announcement on the Information for Financial Aid Professionals (IFAP) Web site.
Direct Loan Borrower Account Transfers from VSAC Federal Loans to Nelnet
We, along with our federal loan servicers, are committed to ensuring that this transfer process goes as smoothly as possible for affected borrowers. We present key information about the upcoming transfers from VSAC Federal Loans to Nelnet in question and answer format below.
Q1: How will a borrower know when his or her Direct Loans have been transferred from VSAC Federal Loans to Nelnet?
A1: When we transfer a student or parent borrower’s Direct Loans from VSAC Federal Loans to Nelnet, the borrower will receive notification by e-mail and/or letter. These communications will include preliminary notice of the transfer and Nelnet’s name and contact information.
In addition to the pre-transfer communications, Nelnet will correspond with the borrower after the transferred loans have been fully loaded to its system. In this correspondence to the borrower, Nelnet will explain that the borrower’s Direct Loans have been transferred and that Nelnet will service the loans on our behalf going forward. The correspondence will include both toll-free phone number and Web site information for Nelnet.
Q2: How will a school know when Nelnet is servicing a borrower’s Direct Loans?
A2: In addition to the student or parent borrower receiving correspondence from Nelnet, Nelnet will be identified as the servicer of the borrower’s Direct Loans in the National Student Loan Data System (NSLDS). Nelnet reports this information to the NSLDS after the transferred loans have been fully loaded to its system. Both the borrower and the school will be able to view the federal loan servicer code and name associated with each loan via the NSLDS Student Access Web site and the NSLDS Professional Access Web site, respectively.
In addition to individual Web lookups, the School Portfolio Report (SCHPR1) is available to schools by request under the Report Tab on the NSLDS Professional Access Web site. This report provides a school with information about all Direct Loan and/or Federal Family Education Loan (FFEL) program loans associated with its school code. It includes loans that are serviced by all servicers, including our federal loan servicers, and provides identifying information about the servicer for each loan. The report is delivered to the school’s Student Aid Internet Gateway (SAIG) mailbox. For the most current information about this report, refer to NSLDS Newsletter 46 on the IFAP Web site.
Q3: How long will it take for Nelnet’s information to be reflected in the NSLDS?
A3: Our federal loan servicers report loan information to the NSLDS on a weekly basis. As a general rule, when we transfer a student or parent borrower’s Direct Loans from VSAC Federal Loans to Nelnet, Nelnet’s information should be available in the NSLDS within seven to ten business days after the transferred loans have been fully loaded to Nelnet’s system and the borrower has been notified.
The majority of servicer-to-servicer transfers are completed on schedule. However, in some cases, issues can occur with the data transfer and delay availability of the information in the NSLDS. If a school is concerned about Nelnet’s information not being available in the NSLDS, it should contact the Federal Student Aid Research and Customer Care Center (RCCC) at 800/433-7327 or firstname.lastname@example.org for assistance.
Q4: Will it be necessary for a borrower to reinitiate actions related to the current status of his or her account (for example, reapply for a deferment or forbearance)?
A4: Loan status information will be included when a student or parent borrower’s Direct Loans are transferred from VSAC Federal Loans to Nelnet. The borrower should experience no break or gap in any current status (such as deferment or forbearance) that applies to his or her Direct Loans as a result of the transfer. If a borrower is concerned about a break or gap in current status, he or she should contact Nelnet for assistance.
Q5: Will it be necessary for a borrower to reinitiate services related to his or her account (for example, account access via the Web, electronic correspondence, and automatic debit or Web payments)?
A5: When we transfer a student or parent borrower’s Direct Loans from VSAC Federal Loans to Nelnet, it may be necessary for the borrower to contact Nelnet to reinitiate some services related to the borrower’s account. After the transferred loans have been fully loaded to Nelnet’s system, Nelnet will provide correspondence to the borrower that explains how the borrower establishes account access via the Web and signs up for other services (such as Web payments and electronic correspondence). Borrowers using automatic debit to make payments will not need to reinitiate this service because this information will be transferred to Nelnet along with the loan transfer information. If a borrower has questions about reinitiating account services, he or she should contact Nelnet for assistance.
Q6: How will new borrower accounts scheduled for allocation to VSAC Federal Loans be handled?
A6: New borrower accounts scheduled for allocation to VSAC Federal Loans will be reallocated among the remaining federal loan servicers.
We appreciate the community’s support as we transfer borrower accounts from VSAC Federal Loans to Nelnet. Please monitor the IFAP Web site for the forthcoming Electronic Announcement that will inform you of the closure and decommissioning dates associated with this federal loan servicer team change.
If you have questions about Direct Loans transferred to Nelnet, contact Nelnet directly. Contact information for Nelnet is available on the IFAP Web site’s Loan Servicing Centers for Schools Contact Information page.