How To Change Your Student Loan Servicer

Dealing with an unresponsive or otherwise difficult loan servicer can be frustrating. The good news is that you’re not necessarily stuck with the servicer you’ve been assigned to. You can change student loan servicers through consolidation or refinancing — though both options come with some trade-offs.

How to change your student loan servicer

There are only a few different ways to change your student loan servicer. The pros and cons of the options vary, with one allowing you to retain the benefits associated with federal student loans, while the other gives you the ability to select from a variety of lenders.

Direct Loan Consolidation

Borrowers who are unhappy with their federal loan servicer but want to maintain their federal student loan status can consolidate their federal loans into a Direct Consolidation Loan. When you consolidate through the official federal program, you’ll have the option of choosing a loan servicer.

Your current options are:

• Aidvantage
• CRI
• Edfinancial
• ESCIx
• MOHELA
• Nelnet
• Default Resolution Group

The downside of consolidating is that you may lose credit for any payments made toward an income-driven repayment plan. If you’ve already made payments toward that program, it’s likely better to keep your current loan servicer and not consolidate. It’s also worth noting that your interest rate will be the weighted average of all loans you’re consolidating, so you may pay more in interest on your loans if you end up on a longer repayment plan.

Refinancing

The other way to change your loan servicer is by refinancing your student loans. When you refinance federal student loans, those loans become private. You’ll lose all federal benefits, including loan forgiveness programs, income-driven repayment plans and extended deferment and forbearance.

You can also refinance private loans with a different private lender. Refinancing gives you more options than consolidation because you can choose from any lender you want and pick a different term. Most borrowers refinance to get a lower interest rate, which can save them hundreds or even thousands of dollars in interest over the life of the loan.

How student loan servicers are changing in 2025

The Department of Education has been improving student loan servicing to deliver what it calls “a 21st-century customer experience.” This ongoing effort is known as Unified Servicing and Data Solution (USDS).

Updates to federal student loan servicers’ websites were rolled out in March 2024. They now feature updated FSA branding and carry the “.gov” designation to help borrowers identify scammers.

FSA will also be introducing a streamlined login experience over the coming years that allows you to access both your StudentAid.gov and loan servicer’s dashboard with the same username and password.

Also, as part of the changes in recent years, three servicers exited the federal student loan servicing business altogether. FedLoan Servicing, Granite State and Navient all ended their contracts. Loans serviced by these companies were transferred to other federal student loan servicers.

Additional changes taking place in 2025 impact student loan forgiveness programs. This year, servicing for a handful of these programs will be switched from designated servicers to StudentAid.gov. Programs that are changing or have changed include:

• Public Student Loan Forgiveness (PSLF) program
• Teacher Education Assistance for College and Higher Education (TEACH) Grant Program
• Total and Permanent Disability (TPD) Discharge Program

PSLF and TEACH were transitioned at the end of 2024, meaning they’re both now fully managed through StudentAid.gov. The TPD Discharge Program’s transition is expected to take place early this year.

Reasons to change your student loan servicer

A common reason borrowers want to switch loan servicers is poor customer service. This may include having trouble reaching a representative or receiving incorrect or confusing information.

But student loan expert Mark Kantrowitz, author of “How to Appeal for More College Financial Aid,” says that borrowers usually won’t solve their problems by changing providers.

“The loan servicers have similar performance, and borrower complaints may have more to do with the design of the loan program and the limits on the servicer’s authority, as opposed to the servicer being mean or incompetent,” he says.

Still, if you’ve repeatedly had bad experiences with your servicer and are considering consolidating or refinancing your loans anyway, switching servicers may not be a bad idea.

Reasons your servicer might change

If you have federal student loans, Federal Student Aid (FSA) may transfer your loans to a new servicer. You will likely receive an email or letter before or after this happens. Private student loans can also be sold to new servicers, but you’ll be notified of this change.

When the transfer occurs, you may need to set up your payment information all over again. If you had automatic payments set up with your previous lender, you’ll likely need to reenroll with the new loan servicer.

What to do if your loan servicer has changed

If you had student loans with one of the servicing companies that left the industry over the past year and have been switched to a new servicer, or if your servicer sold your loans to a different company, it’s still important to keep all of your previous statements, tax forms and other documents. Store these on the cloud where you can easily access them.

Maintaining this information is important to ensure you have documentation about the history of your loan payments and that all information about your loan balance remains correct moving forward.

If you’re not satisfied with your new loan servicer, loan consolidation may be the best move to access a new servicer. You can also file a complaint with the Department of Education.

Bottom line

If you’re unhappy with your current student loan service it’s possible to change. Direct consolidation of your loans or refinancing altogether are two ways to obtain a new servicer. But remember, when you refinance federal student loans with a private lender, you will lose important benefits such as income-driven repayment and loan forgiveness so be sure to consider the options carefully before proceeding.