Student Loan Customer Service: What Your Servicer Can Do

When you're repaying college debt, staying on top of your payments is the No. 1 rule. But if you need help along the way, your federal student loan servicer is your go-to source for student loan customer service.

Here's what your servicer's customer service team can help you do to stay on track.

» MORE: Federal student loan servicers: Who they are and what the do

1. Servicers collect, and keep track of, your payments

The federal government contracts with eight student loan servicing companies to collect and manage all those borrowers' monthly payments. So when you pay your federal loan bill each month, you send it not to the government directly, but to one of these companies.

Your servicer will contact you after your first federal loan is disbursed, and it's best to register for an account on its website right away. You can get in touch with all of the loan servicer contact centers by calling 1-800-4-FED-AID. You can start keeping track of how much you've taken out and how much interest adds up while you're in school. Once you graduate, sign up for automatic monthly payments through your servicer so you're less likely to fall behind.

The federal student loan servicers

Learn more about each of the federal loan servicers, including what they can do and how to contact.

2. Servicers help you pick the repayment plan that's right for you

When you complete a federal loan exit counseling session your senior year of college, you'll have the opportunity to pick a student loan repayment plan, which determines the amount you're required to pay each month toward your loans. Many students aren't aware of the federal government's many repayment options, so they stick with the standard repayment plan. The standard plan breaks up your total balance into 120 fixed payments over 10 years, and if you have a lot of debt it can be difficult to afford as a new grad.

Student loan servicers can help you enroll in one of the government's income-driven repayment plans, which tie your loan payments to your income to make your payments more affordable. You'll be required to fill out an application and re-certify your income every year to stay eligible. Your servicer will work with you — for free — to make sure all your documents are in order.

3. When you give servicer instructions, they customize your payments

Once you start earning enough money to pay extra toward your loans, you might want to pay off certain loans first — like the ones with the highest interest rates, which will help you save money in the long run. Some servicers will automatically apply an extra payment across all your loans in a certain billing group, but you can call, email or write them a letter instructing them to apply an extra payment to a certain loan instead.

» MORE: What federal student loan servicing companies might not tell you

Federal regulations require your servicer to apply extra payments first to late fees, then to accrued interest and, finally, to the principal balance, or the original amount of the loan you took out. Contributing more than your scheduled payment will reduce both your overall balance and the interest you pay over time, so kick in a little more than you need to when you can.

» MORE: How to pay off student loans fast

4. Servicers process your requests for deferment or forbearance

In a single 10-year repayment term, there may be periods when you can't afford your loan payment; you could lose your job, get sick or decide to join the Peace Corps. No matter what keeps you from being able to pay your bill, call your loan servicer to let it know as soon as you can.

Before you start falling behind, you'll have the option to apply for deferment or forbearance, temporary postponements of your payments during periods of financial difficulty.

» MORE: Deferment vs. forbearance: Which is right for your student loans?

Deferment will save you more money, since subsidized loans don't accrue interest while they're deferred. All your federal loans will continue to accrue interest during forbearance, but it's a good option for borrowers who don't qualify for deferment. Your servicer will help you determine which one you're eligible for and how to get it.

5. Servicers are your first point of contact if you're interested in loan forgiveness

Grads who work full-time for the government or for nonprofits should ask their servicers about the Public Service Loan Forgiveness program (PSLF). Make 120 on-time payments toward federal Direct Loans as a public service employee, and your remaining balance will be forgiven if you're still working in the public interest at the time of forgiveness.

To make sure you're on track to get the benefit, your servicer can help you determine whether your loans are eligible, whether you're on a qualifying repayment plan and whether you've properly filled out the Employment Certification Form. The servicer MOHELA manages the PSLF program for the government, so your loans will be transferred to that servicer if you don't already work with it.

Servicing changes are underway

The Department of Education is planning to shift the student loan servicing landscape by signing new servicing contracts with five companies to eventually take over all loan servicing by the end of 2023. That means your loan servicer is likely to change, if it hasn't already.

Granite State (GSMR) and Navient stopped servicing loans in December 2021, when their contracts expired. Navient's loans were transferred to Aidvantage, the servicing arm of Maximus, a government contractor. GSMR's loans were transferred to Edfinancial.

MOHELA manages all Public Service Loan Forgiveness applications. It has also taken over existing PSLF loans from FedLoan, a servicer whose contract expired in December 2022.

Prior to servicing contracts ending, borrowers should do the following:

• Download and save your payment history from your online account or request a copy from your servicer.

• Update your contact information with your most recent address, phone number and email address.

You’ll be notified when a loan servicing transfer happens, and you’ll manage payments with the new servicer. All servicers deliver the same options and programs, but customer service may differ from one to another.

What to do if you're unhappy with your servicer

Your servicer's role is to help you. But if you're experiencing an issue with the company that you're having trouble resolving, first contact the company's highest customer service point person, often called an ombudsman.

If that doesn't help, you can submit a complaint to the Federal Student Aid Ombudsman Group of the U.S. Department of Education.

Keep in mind that there are always resources available to you if you need help repaying your federal loans. Instead of ignoring the problem, work with your servicer and the U.S. Department of Education, if necessary, to get back in good standing and commit to getting out of debt.