The federal government has promised millions of student loan borrowers a smooth transition as their accounts are transferred from one servicing company to another.
Borrowers whose federal student loans were serviced by Navient won’t have to change their login information, their automatic payment information, or update other personal details as the company transitions their accounts to another servicer, Maximus, the Department of Education said Wednesday in announcing it had approved the transfer. The department also promised that updates and specific information would be made available at StudentAid.gov.
Navient said last month it was quitting the federal student loan servicing business, creating uncertainty among about 5.5 million borrowers whose loans were serviced by the company. Maximus currently services federal student loans in default.
“We will make this transition as seamless as possible,” Federal Student Aid Chief Operating Officer Rich Cordray said in a statement.
Navient was the third major student loan servicer in recent months to announce it was quitting and transferring its accounts to another company. The transfer comes as 43 million student loan borrowers are facing uncertainty as they approach the Jan. 31 end date of a pause on payments, interest, and collections that was imposed when the pandemic hit. While the Education Department is owed 90% of the total $1.6 trillion in federal student loans, it doesn’t send the bills or answer calls itself, outsourcing the work instead to privately owned servicing companies.
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