Federal Student Loan Servicers: Who They Are and What They Do (2024)

ECSI, Nelnet, MOHELA. What do these names have in common? They’re all federal student loan servicers. And if any of them ring a bell, you’ve probably got student loans you’re trying to pay off.

With federal student loan payments starting back up after being on pause for more than three years (almost as long as the Jonas Brothers’ hiatus), it’s important to know everything you can about your student loans—including who your loan servicer is.

But what exactly is a federal student loan servicer, and what do they do? Let’s get into it!

Who Are Federal Student Loan Servicers?

Federal loan servicers are the ones who handle your federal student loans. Makes sense, right?

In case you didn’t know, federal student loans are funded by the U.S. Department of Education (ED), while private student loans are funded by a bank, credit union, state loan agency or other financial institution.

Even though the government may own your federal student loans because they lent you the money for college, the ED assigns private companies—loan servicers—to handle the billing and other loan details on their behalf. As soon as your federal loan is paid out, you get assigned a loan servicer, and they become your point of contact for that loan.

Here are the loan servicers the ED works with:¹

• Edfinancial
• MOHELA (Missouri Higher Education Loan Authority)
• Aidvantage
• Nelnet
• OSLA (Oklahoma Student Loan Authority) Servicing
• ECSI (Educational Computer Systems, Inc.)
• Default Resolution Group

Good to know: If you’ve got Federal Perkins Loans not owned by the ED, your loan servicer might be the school where you received your loan.

Who Is My Federal Student Loan Servicer?

Here are two ways to find out who your loan servicer is:

Option 1: Log in to My Federal Student Aid.

Once you log in to your account, scroll down to “My Loan Servicers” to see your loan details—including your loan servicer. If you don’t already have an account with that servicer, you’ll need to create one.

Option 2: Call the Federal Student Aid Information Center (FSAIC) at 800.433.3243.

Good to know: Your loan servicer can help answer any questions you have about your student loans for free. So watch out for scam companies who try to charge you money for federal student loan help!

Heads Up: Your Loan Servicer May Have Changed

Don’t be surprised if your student loans were automatically transferred during the payment pause (yep, it happens). In fact, about 16 million people are expected to have a different loan servicer this fall.²

If you have a new loan servicer, you should’ve received an email or letter about the switch—but make sure to reach out to double-check your loan balance and terms.

Here are some of the recent student loan transfers:

• Navient loans are now under Aidvantage.
• GSMR loans are now under Edfinancial Services.
• Great Lakes loans are now under Nelnet.
• All loans enrolled in Public Service Loan Forgiveness (PSLF) previously under FedLoan Servicing are now under MOHELA.

What Do Federal Student Loan Servicers Do?

They manage your federal student loan payments.

Your loan servicer is who you send your student loan payments to. Their job is to let you know how much you owe each month and keep track of all your payments so you can stay in good standing. Likewise, if you don't pay your student loan, they’re the ones who report your delinquency to credit bureaus or put your loan into default.

Loan servicers also supervise repayment plans. Most of the time, they’ll automatically put you in the standard 10-year repayment plan. But if you decide to switch to another payment plan, your loan servicer is the one who processes your application and makes sure you’re eligible.

Good to know: Your loan servicer may push you toward a plan with a lower monthly payment (like an income-driven repayment plan). But trust us, that will only keep you in debt for way longer. Choose the plan that will help you pay off your student loans the fastest—and save you the most in interest!

They process requests for deferment or forbearance.

If you can’t pay your student loan payments, you have the option to temporarily postpone your payments through deferment or forbearance. If you choose to go that route, you’d apply through your loan servicer.

But while deferment and forbearance may hold off payments for a little while, they don’t make your student loan debt go away. In fact, the interest on your loan usually continues to grow—which means you’ll most likely end up with a higher balance in the end. Don’t even think about going this route unless you’re struggling to put food on the table!

They keep track of your forgiveness progress.

There are a lot of hoops to jump through when it comes to federal student loan forgiveness. And if you’re currently enrolled in a forgiveness program or you’re thinking about it, your loan servicer is the one who sets up your payment plan and determines whether your payments qualify for forgiveness.

But listen, Public Service Loan Forgiveness and other forgiveness promises are just that—promises (and we all know how good the government is at keeping those). Even if your loan servicer checks all the boxes on your application, there’s no guarantee your loans will be forgiven. In fact, only about 2% of PSLF applicants ever see forgiveness!³

Can I Change My Student Loan Servicer?

For the most part, the loan servicer you get assigned is the one you’ll have until you pay off your loan. You can switch loan servicers, but only if you do one of the following:

• You consolidate your federal loans. Combining your federal loans into one new federal direct loan allows you to choose a new loan servicer. But it’s not the right choice for everyone.
• You enroll in Public Service Loan Forgiveness. Your loans will automatically be transferred to MOHELA if you choose this payment plan.
• You refinance with a private lender. You can choose to refinance and trade in your federal loan for a private loan under a new loan servicer. But you also give up the protections federal student loan borrowers have.

You’re the One in Charge of Your Student Loans

Here’s the deal: Loan servicers are private companies who get paid for every loan they service. They care more about making money than whether you pay off your student loans. And they’re going to steer you toward payment plans that benefit them, not you.

Loan servicers may be who you go to for information about your student loans, but when it comes to paying them off—that’s all you.

You don’t have to be a slave to a specific payment plan that lasts for decades or a forgiveness program that may or may not wipe your slate clean. You have the power to ditch your student loan debt for good!

Instead of just going along with whatever plan your loan servicer suggests, make your own plan.

First things first: Get on a budget. When you have a written plan for your money, you can confidently cover your student loan payment—and then some. And the more you can throw at your loans, the sooner you can get them out of your life once and for all!

You decide when you pay off your loans—not your loan servicer. Sorry, not sorry, MOHELA.

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.