Current Best Federal Loan Servicers Ranked

Following are the current Federal Loan Servicers ranked according to the number of complaints they get and their overall service.

ECSI is one of the smaller federal loan servicers but is on the top of our list. It is a campus-based loan servicer for colleges and universities, providing support to federal student loan borrowers. It supports mainly the federal Perkins student loans and is comparatively a responsive company that provides better customer service and support. They also have much fewer customer complaints compared to all the other federal loan servicers.

Pros

• Provides a convenient online portal for students and borrowers to access and manage their loan information
• Offers automatic payment options for borrowers
• Offers a variety of repayment options, such as extended repayment, and graduated repayment, and also processes deferment and forbearance requests
• Provides flexible customer service options, including phone, email, and online chat

Cons

• Only services student loans, and does not offer other types of loans such as personal loans
• Websites and online portals may not provide all the information that borrowers need to make informed decisions about their loans.
• Online portals have limited functionalities. 

Nelnet is a big company that manages a considerable portion of the total federal debt. It does have many customer complaints but is the better one out of all the big names among federal loan servicers. It received around 120 complaints per million customers according to the Consumer Financial Protection Bureau (CFPB) data from 2018 to 2019. It recently merged with Great Lakes which was another good federal loan servicer.

Pros

• Offers online account management and automatic payments, making it easy to stay on top of your loan repayment
• Offers a variety of repayment plans, including standard, graduated, and extended repayment, as well as consolidation and forgiveness options
• Provides good customer service

Cons

• May charge fees for certain services, such as for loan consolidation
• There have been some reports of delays in processing payments and applications. 
• There have been reported complaints of mistakes or mishandling of accounts.

EdFinanacial is a smaller servicer comparatively and, therefore, has fewer complaints than some of the other federal loan servicers. Its customers usually have complaints regarding bad customer service and uninformed customer service representatives who are unable to solve issues or provide the correct information.

Pros

• Has an online portal that allows borrowers to easily access their loan information, make payments, and track the status of their loan
• Offers various payment options to borrowers, including online payments, automatic payments, and mail-in payments
• Fewer complaints than other big federal loan servicers
• Offers different repayment options, including standard, extended, and graduated repayment

Cons

• Reported difficulties in getting in touch with Edfinancial customer service representatives and receiving inadequate assistance
• Reported challenges in accessing loan information
• Reported delays in the processing of loan payments or loan forgiveness applications

MOHELA, or Missouri Higher Education Loan Authority, is one of the three biggest loan servicers with more than 40 years of experience. It also manages the Public Service Loan Forgiveness (PSLF) program for all Direct Loan borrowers.

The most common complaints about MOHELA are related to poor customer service with long call hold hours and misleading or incorrect information. Moreover, recently, it failed to send timely bills to 2.5 million borrowers causing a lot of inconvenience.

Pros

• As a  non-profit servicer, it is invested in helping borrowers manage and repay their loans
• Offers a variety of repayment plans, including income-driven repayment plans
• Has a loan forgiveness program and alternative repayment options such as loan consolidation
• Offers online account management and  bill payment
• Has a dedicated customer service department

Cons

• Services a wide range of loans, which could make it difficult for borrowers to get the specific help they need.
• Information may get lost or mixed up when transferring loans due to the bulk of them
• Borrowers may find the customer service is less responsive or effective than they would like.
• May have some additional fees associated with repayment or late payments

Aidvantage is a recent federal loan servicer that started servicing loans at the end of 2021. It is a big servicer with around 5.6 million loan accounts. It is the servicer with the highest amount of complaints with more than 300 complaints in just the month of October 2023. In the year 2022, it had more than 800 complaints according to the CFPB, and numbers have risen since then.

Pros

• Offers a variety of loan options and services
• Offers different repayment plans to fit the needs of individual borrowers, including income-driven repayment plans
• Offers loan consolidation
• Has a large customer service team that is available to answer questions and help customers with their loans

Cons

• Has been the subject of numerous complaints from customers
• Confusion over its relationship with Navient and how borrowers are affected when their loans were transferred from Navient
• Poor customer service

A federal loan servicer is a company that manages the billing and other services on your federal student loan. The servicer works with the Department of Education to help borrowers manage their loans. These types of companies offer services that include the following:

• Billing & Payment Processing: Federal loan servicers send out billing statements and process payments from borrowers. They may also offer options such as automatic debit or online payment to make it easier for borrowers to manage their loans.
• Repayment Plan Assistance: Federal loan servicers can help borrowers explore different repayment plan options, including standard, extended, graduated, and income-driven repayment plans.
• Deferment and Forbearance: Federal loan servicers can help borrowers request a temporary postponement or reduction of their loan payments through a deferment or forbearance.
• Loan Forgiveness & Discharge: Federal loan servicers can help borrowers explore options for loan forgiveness or discharge, such as the Public Service Loan Forgiveness program or the Teacher Loan Forgiveness program.
• Communication & Customer Service: Federal loan servicers are responsible for communicating with borrowers about their loans, as well as addressing any questions or concerns they may have.

If you have a federal student loan, you will be assigned a loan servicer by the Department of Education. To find out who your servicer is, log into your account on the Federal Student Aid website or contact the Department of Education directly.

Discover who your federal loan servicer is using the following steps:

1. Go to the Federal Student Aid website (https://studentaid.gov/).
2. Navigate to and click on the  “Log In” button.
3. Once you are logged in, click on the “Loans” tab in the top menu.
4. On the “Loans” page, you should see a list of all of your federal student loans. Each loan will have the name of the servicer listed next to it.

Alternatively, you can contact the Department of Education directly to find out who your servicer is. You can do this by calling the Federal Student Aid Information Center at 1-800-433-3243 or by sending an email to the Federal Student Aid Information Center through the form at https://studentaid.gov/help-center/contact.

The process of getting in touch with the Federal Student Aid (FSA) Ombudsman Group is relatively straightforward. You can contact the group by:

Phone: 1-800-433-3243

Mail: U.S. Department of Education, Office of Federal Student Aid, P.O. Box 1854, Monticello, KY 42633

Online: visit https://studentaid.gov/feedback-ombudsman/disputes/prepare and submit a complaint.

Unfortunately, the Department of Education doesn’t let borrowers choose or change their student loan servicers. However, you can choose to consolidate your federal loans which allows you to combine multiple eligible federal student loans into one single loan. Through Direct Loan Consolidation, the government allows the borrower to choose their new federal loan servicer from a given list. Consolidation allows the borrowers to get new repayment terms and the borrower has to pay one single payment each month making repayments more manageable.

The only other option to get rid of your existing federal loan servicer and the associated issues is to refinance your federal student loan with a private lender. This way the private lender pays off your federal student debt by giving you a loan. The new private loan you get may have different interest rates and terms. However, when refinancing with a private company, the borrowers lose all the benefits associated with federal loans like the lowest interest rates, income-driven repayment plans, and loan forgiveness. Private loans are usually dependent on the borrower’s credit score. The better the credit score is, the better rates they can avail. There is also an option of getting a credit-worthy cosigner, with FICO scores above 700, to sign the loan with for better rates and a higher chance of approval.

When a student loan servicer changes, it means that the company that manages and collects payments on your student loan has been transferred from one company to another. This can happen for a variety of reasons, such as if the original servicer goes out of business or if the loan is sold to another company.

When a loan servicer changes, it can mean that you’ll have to start making payments to a different company and that the contact information as well as online portals you used to manage your loan may change. It’s important to stay informed of the change and to reach out to the new loan servicer if you have any questions or concerns. You should also update your contact information and make sure that you are aware of any new deadlines, fees or requirements that may come along with the change of servicer.