What Are Student Loan Servicers and What Do They Do?

Scandals involving student loans servicers are no strangers to the headlines; and with over 17k complaints filed against them, borrowers are starting to ask more questions about who handles their debt. This guide will help you make sense of who student loan servicers are and what they do.​

Student loan lenders

There are two kinds of student loans; federal and private. According to U.S. News, 90 percent of the student loans issued last year were federal loans. Federal student loans are funded by the federal government, while private loans are funded by banks, credit unions, schools, or state agencies. All of these examples are considered lenders.

Student loan servicers

Unlike lenders, servicers don’t lend money. Student loan servicers are 3rd party companies hired to collect debt when it’s time to start paying your loans back. There are many servicers currently in charge of collecting student debt; but unfortunately, you can’t choose your own. Your lender most likely already has a deal with one, or a few different servicers, which will then become your servicer. You may even go through a few different servicers throughout the years. You can change your servicer under certain circumstances, like if you consolidate your federal student loans, or refinance through a private lender, which each has its own pros and cons to consider. If you run into common alleged issues such as misleading information or fraud with your servicer, you can file a complaint with your servicer and The Department of Education.

So what is Docupop?

Docupop is a master in the middle. Let’s say you want to switch to an IDR (income driven repayment plan) to try and achieve a lower monthly payment. The process to qualify and apply can be complicated. The chances for filing errors are high, deadlines can get confusing and getting your servicer on the phone for an in-depth conversation can be tough. Enter Docupop! Our success coordinators focus on providing you with the most accurate information possible so you can confidently choose the best plan for you. Unlike servicers, Docupop strives to provide a 100% accuracy guarantee on all documentation; not to mention our friendly customer service is here to answer all of your questions if and when you need us. Click below to get help with your student loans now!

References

https://www.consumerfinance.gov/ask-cfpb/what-is-student-loan-servicer-en-583/

https://loans.usnews.com/what-is-a-student-loan-servicer