Millions of student loans being serviced by new company | What you should know
PHILADELPHIA -- Millions of student loans are now being serviced by a new company. If you're impacted by this, by now you should have received notification of the change.
It actually went into effect at the end of last year but it flew under the radar since payments on student loans have been on a pandemic pause. But with payments set to resume, the Troubleshooters are now getting questions about it.
"I have received information stating that Aidvantage was now taking over Navient, which Navient was taken over by Sallie Mae," said Pamela Walters of Bear, Delaware. "So now I'm really confused."
So are a lot of other student loan borrowers. So here's what you need to know.
"Navient, over the last few years, has run into some regulatory issues," said financial analyst and advisor Chuck Minnich of Foundation Capital Management, LLC.
SEE ALSO: From debt forgiveness to repayments resuming, here's what you should know about student loan changes
Navient, one of the nation's largest student loan servicers this year, agreed to cancel $1.7 billion of debt to resolve allegations of unfair, deceptive practices and predatory loans.
"So Navient decided to get out of the business and transfer their federal loans over to Aidvantage," he said.
The transfer started last fall and the website changed for borrowers at the end of 2021.
But many people haven't been aware and are now experiencing false hope.
"Many people are logging on to their Navient site and seeing a zero balance," Minnich said. "It turned out to be a cruel joke because the loan balance just transferred over to Aidvantage."
Here's what borrowers should do now before loan payments are set to resume in September: Go to the Aidvantage website and log in using your Navient credentials.
"With 5.6 million loans being transferred, there have been some issues so you want to make sure everything is accurate before payments begin whenever they do," said Minnich .
To emphasize, Navient transferred federal loans on behalf of the U.S. Department of Education. Navient still owns and services other loans and many borrowers, so it's possible some have to pay both Navient and Aidvantage.
The best thing to do is to log onto both websites now. And if your financial situation has changed since you last reviewed loan repayment options, consider applying now through Aidvantage.
Navient Statement:
While loans serviced on behalf of the U.S. Department of Education were transferred to another service provider last year, Navient owns and services other student loans. While we can't share any information about a customer without their express permission, our customer advocates will reach out to the viewer to assist with questions and help explore payment options.
Aidvantage Statement:
Many student borrowers have two types of loans: those that are owned by the U.S. Department of Education (DOE), and loans that are owned by private commercial entities. Aidvantage exclusively services DOE loans. Aidvantage does not and never has provided servicing for loans owned by private commercial entities. Last year, Aidvantage took over loan servicing for DOE loans previously serviced by Navient. To ease the transition for borrowers, we worked to keep those DOE loans on the same servicing system, with all borrower information seamlessly transferred. We also structured the transfer in a way that allowed borrowers with an existing online account to retain their login information, streamlining their move to Aidvantage. Borrowers may confirm the servicer(s) of their loans through the National Student Loan Data System at StudentAid.gov, which is a DOE-maintained database of all federal student loan debt.
