What the acquisition of Nelnet means for your student loans

Nelnet, one of the nation’s largest student loan managers, has agreed to buy a competing student loan manager, Great Lakes Higher Education Corp., for $ 150 million in an all-cash transaction.

The move will make Nelnet, based in Nebraska, the largest provider of federal student loans and represents a significant consolidation in the student loan services industry.

With this transaction, Nelnet / Great Lakes, Navient and FedLoan Servicing (PHEAA) become the top three student loan managers who collectively manage over $ 1,000 billion in student loans.

So what does this acquisition mean for your student loans?

Here’s what you need to know.

What is a student loan manager?

Think of a student loan manager as providing both customer service and repayment assistance during the life of your student loan.

Student loan managers play an intermediary role between a borrower and a lender. They process monthly student loan payments, manage borrower accounts, and answer borrower questions.

If you are borrowing a student loan, your lender may not be the entity that manages your student loan after it is disbursed. Although some companies act as both a lender and a manager, often a separate company takes care of your loan.

A loan manager will also work with you for free on student loan repayment plans and student loan consolidation.

It’s possible – and more common today – for your lender (either the federal government or a private lender) to transfer your student loan to one or more agents while your student loan is being paid off.

You don’t have to worry if you receive a notice that your student loan has been transferred to another administrator. It is not a reflection of you or a student loan.

If this happens, you should contact your new student loan department and update your bill payment information if you are using automatic payment (which you should). Also, if your student loan is transferred to a new student loan manager, your loan terms will not change.

How will this acquisition affect me as a student loan borrower?

The companies said they did not expect borrowers to experience a change in service as a result of the acquisition.

The transaction is expected to close on January 1, 2018, subject to regulatory approval. Following the transaction, the companies plan to operate under their respective names and brands. Each company has a federal student loan management contract with the US Department of Education that will expire in 2019.

According to the United States Department of Education’s Federal Student Aid Office, in June 2017, Great Lakes and Nelnet had the two highest borrower satisfaction ratings among the top nine student loan managers.

Can I choose my student loan manager?

No. Your student loan manager is assigned to you.

If you have a federal student loan, the United States Department of Education will assign you a student loan officer after your student loan has been disbursed. Likewise, if you have a private student loan, your lender will assign a student loan manager.

What if Great Lakes were your student loan manager?

If Great Lakes is your student loan manager, you still have to make your student loan payments in the normal course.

For more information regarding the acquisition, you can contact Grands Lacs by telephone at 1-800-236-4300.

Can I change my student loan manager?

Usually, you can’t change your student loan officer.

However, you should expect your student loan manager to change at least once during your student loan repayment. Why? The US Department of Education may transfer your federal loan to a new student loan manager to ensure you have proper customer service and repayment assistance.

One way to change your student loan officer is to consolidate student loans. If you consolidate with a Federal Direct Consolidation Loan, your existing student loans are combined into one student loan with one student loan payment. However, the interest rate on your student loan does not go down with the student loan consolidation.

When consolidating your student loans, you can choose one of four student loan managers: Navient, Nelnet, Great Lakes, or FedLoan Servicing. There is no guarantee that after your selection of a student loan manager, your student loan will be transferred to another student loan manager.

What are my other student loan options?

One of the roles of your student loan manager is to help you understand your available options with respect to your student loans. In addition to the federal student loan consolidation, here are a few other options:

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