The majority of student loan borrowers should expect to have a new servicer come December
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Five companies — Edfinancial, F.H. Cann & Associates, MAXIMUS, MOHELA, and Texas Guaranteed Student Loan Corporation — will be the new servicers for all student loans. Loans currently serviced by these companies will remain there. Edfinancial and MOHELA currently service a combined 32% of all federal student loans as of December 2019. Borrowers with loans serviced by those lenders may not see any changes to their servicer. But, the remaining 68% of borrowers with loans serviced by Great Lakes, Fedloan, Nelnet, Granite State, Navient, Cornerstone, and OSLA will have their loans migrated to these other servicers in December 2020 if everything continues according to plan.
Given the close timing, he thinks there is plenty of opportunity for errors. Hornsby says it's possible that some student loans could stay in forbearance, or slip from the current national emergency forbearance to a regular forbearance where interest capitalizes and unpaid interest becomes a part of the loan. "When we have servicers change, we see all kinds of problems," Hornsby said.
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