In a cash transaction, Nelnet, one of the biggest loans servicers in the nation, will be acquiring Great Lakes Higher Education Corp. for $150 million. With this consolidation within the student loan servicing sector, Nelnet will now become the largest servicer of Federal loans according to Forbes. This is how will this transaction affect student loans.
First Off: Do You Know What a Student Loan Servicer Does?
A student loan servicer acts as the middleman between the borrower and the lender. They handle all customer service and repayment support for the entire duration of your loan. This is not unusual since typically a lender is not the one that manages the loan. However, a company can act as both the lender and the servicer.
If you do receive notice that your loan has been transferred to another servicer, don’t panic—this usually happens a few times during the lifespan of the loan. If this does happen, just know it has nothing to do with you, but you will want to contact the new servicer to ensure that your billing information is correct and set up properly.
Will This Transaction Affect Student Loan Borrowers?
According to Jeff Crosby, the Great Lakes chief executive officer, he stated in a press released that “our values and teams complement each other and I am confident we will be able to do even more to improve the lives of the borrowers, lenders, and schools we serve as a part of the same team.” Currently, both companies don’t expect that the borrower experience will be affected. The transaction is aiming to close January 1, 2018, though it has to go through regulatory approval. Both will continue to operate under their own respective name and brands. And to ease your nerves a little more, both have the highest customer satisfaction ratings among the nine major student loans servicers according to the U.S. Department of Education, which reported these findings in June.
New Innovative Servicing Technology
Nelnet and Great Lakes were already working together before this partnership. According to PR Newswire, they have been working on a new servicing system for the last two years. The servicing platform that they are developing is supposed to improve scalability, offer greater protection for borrower information, and improve borrower support initiatives. According to Joe Popevis, president of Nelnet Diversified Solutions, “moving forward with the development of our state-of-the-art loan servicing platform will enable us to provide the best possible experience for borrowers as our organizations come closer together.”
What If My Servicer Is Great Lakes?
If your student loans servicer happens to be Great Lakes, then you will continue to make payments as normal. This transaction should not affect your experience as the companies have already stated.
And if for some reason you want to change servicers, just know that you typically can’t do this. Your student loan servicer is assigned to you, and you do not have a choice when your servicer changes, though your loan terms do not change and you should not be affected by such a change.