Navient turned the newest federal student loan servicer to decide out of the enterprise when it mentioned it should now not service the loans, leaving about six million debtors ready to be assigned to a brand new lender.
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The firm’s choice to give up student loans, introduced on Tuesday, left the U.S. Department of Education with out one in every of its largest student loan servicers. Navient’s student loan portfolio is estimated at about $1.7 trillion, CNBC reported.
Navient is the third lender this yr to finish its relationship with the federal authorities. The others are FedLoan and Granite State. According to The New York Times, Navient needs to maneuver its loans to Maximus, one other federal loan servicer, as a manner to supply a clean transition to debtors as Navient focuses on different companies.
The Education Department is within the strategy of reviewing info from Navient and Maximus to “ensure that the proposal meets all legal requirements and properly protects borrowers and taxpayers,” Richard Cordray, chief working officer of the division’s Federal Student Aid workplace, mentioned in assertion.
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Nearly all present federal student loan debtors have been allowed to skip their funds because the authorities imposed a moratorium on collections in March 2020 in response to the COVID-19 pandemic. But the Biden administration has mentioned it should restart collections on Jan. 31, 2022.
The choice by Navient, FedLoan and Granite State to exit the federal student loan enterprise has left about 16 million debtors ready to be assigned a brand new servicer, greater training professional Mark Kantrowitz instructed CNBC.
“Problems can occur with any transition, so there are a few things borrowers should do now if their servicer will be changing,” Kantrowitz mentioned.
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He recommends logging into your present loan servicer’s web site and saving or printing a replica of your loan info. Keeping this helpful will help make sure that your loan info is correct after it’s transferred to a brand new servicer.
“Get a list of all your loans, including your payment history, current loan balances, interest rates and monthly loan payment amount,” Kantrowitz mentioned.
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You additionally ought to double-check that your servicer has your present contact info to make sure that you get notices about upcoming modifications. If you’re unemployed or in any other case coping with a monetary hardship, you may request an financial hardship or unemployment deferment. If you don’t qualify for these, one possibility is to make use of a forbearance to droop your funds, although this may result in a better stability when funds resume.
Meanwhile, if you happen to surprise how a doable authorities shutdown this week would possibly impression student monetary help, the reply will not be a lot — at the very least if the shutdown doesn’t final too lengthy.
As GOBankingRates reported, a shutdown gained’t have an effect on student monetary help as a result of the Education Department’s Office of Federal Student Aid makes use of outdoors contractors for many of its administrative work. Since monetary help goes out originally of the semester, a authorities shutdown shouldn’t delay monetary help funds — except it lasts into the beginning of the winter semester.
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This article initially appeared on GOBankingRates.com: As Navient Leaves 6 Million Student Loans Stranded, What Should Borrowers Do Now?