Department of Education Loan Servicer Transfer
From January through August 2013, we will transfer William D. Ford Federal Direct Loan (Direct Loan) Program loans currently assigned to the Direct Loan Servicing Center (ACS) to FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae.
The Department of ED plans on transferring the accounts of loan borrowers who are in an in-school or in-school deferment status in January and February. From February through August, ED will complete the transfer of accounts of borrowers whose loans are in any status other than in-school or in-school deferment.
Below is a Q & A guide about loan transfers
Q1: How will a borrower know if his or her Direct Loans have been transferred?
A1: When we transfer a student or parent borrower’s Direct Loans from the Direct Loan Servicing Center (ACS) to a new servicer, the Direct Loan Servicing Center (ACS) will send an e-mail notification to the borrower provided there is a valid e-mail address on file. The e-mail will include preliminary notice of the transfer and the new servicer’s name and contact information.
Regardless of whether the borrower receives an e-mail notification from the Direct Loan Servicing Center (ACS), the new servicer will correspond with the borrower after the transferred loans have been fully loaded to its system. In this correspondence to the borrower, the new servicer will explain that the borrower’s Direct Loans have been transferred and that the new servicer will service the loans on our behalf going forward. The correspondence will include both toll-free phone number and Web site information for the new servicer.
Q2: How will a school know which federal loan servicer is servicing a borrower’s Direct Loans?
A2: In addition to the student or parent borrower receiving correspondence from the new federal loan servicer, the new servicer will be identified as the servicer of the borrower’s Direct Loans in the National Student Loan Data System (NSLDS). The new servicer reports this information to the NSLDS after the transferred loans have been fully loaded to the new servicer’s system. Both the borrower and the school will be able to view the federal loan servicer code and name associated with each loan via the NSLDS Student Access Web site and the NSLDS Professional Access Web site, respectively.
Q3: How long will it take for the new federal loan servicer information to be reflected in the NSLDS?
A3: The federal loan servicers report loan information to the NSLDS on a weekly basis. As a general rule, when we transfer a student or parent borrower’s Direct Loans from the Direct Loan Servicing Center (ACS) to a new servicer, the new servicer information should be available in the NSLDS within seven to ten business days after the transferred loans have been fully loaded to the new servicer’s system and the new servicer corresponds with the borrower.
Q4: Will it be necessary for a borrower to reinitiate actions related to the current status of his or her account (for example, reapply for a deferment or forbearance)?
A4: Loan status information will be included when we transfer a student or parent borrower’s Direct Loans from the Direct Loan Servicing Center (ACS) to a new servicer. The borrower should experience no break or gap in any current status (such as deferment or forbearance) that applies to his or her Direct Loans as a result of the transfer. If a borrower is concerned about a break or gap in current status, he or she should contact the new servicer for assistance.
Q5: Will it be necessary for a borrower to reinitiate services related to his or her account (for example, account access via the Web, electronic correspondence, and automatic debit or Web payments)?
A5: When we transfer a student or parent borrower’s Direct Loans from the Direct Loan Servicing Center (ACS) to a new servicer, it will be necessary for the borrower to contact the new servicer to reinitiate some services related to the borrower’s account. After the transferred loans have been fully loaded to the new servicer’s system, the new servicer will provide correspondence to the borrower that explains how the borrower establishes account access via the Web and signs up for other services (such as Web payments, electronic correspondence, and, if necessary, automatic debit). If a borrower has questions about reinitiating account services, he or she should contact the new servicer for assistance.
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