Navient is one of the largest student loan processing companies. Nearly six million of its borrowers have federal student loans, but under a deal announced Tuesday, those borrowers would have to work with a new company.
"That means those borrowers, those who use them, are going to have to start working with a completely new company," said Tobin Van Ostern, co-founder of the student loan support company Savi.
Van Ostern says this move still has to be approved by the U.S. Dept. of Education, but other companies have done the same thing.
"In just the past few months we've now had two of the largest servicers in the country say they're done," said Van Ostern.
So what does this mean for borrowers? If the Naviant deal is approved, the loans will now be serviced by Maximus.
"Borrowers will receive notification, both from their current servicer and from the U.S. Department of Education regarding any changes," said Van Ostern. "I do think it's very reasonable for borrowers to be concerned that there will be errors or mistakes as part of these transitions."
Right now, Federal student loan payments are still suspended. Those payments will resume Feb. 1.
"Imagine if you paused your credit card payments for two years then your companies are changing who has your credit card and we're going to resume them all at the same time," said Van Ostern. "That gives you a sense of the scope and scale of the problem."
There are several things that you can do to try and make the process as smooth as possible.
- Log into your online account and make sure all your contact information is up to date.
"Have you moved since then or has your phone number changed?" asked Van Ostern. "Has your email changed?"
2. Look out for scams. People will try to take advantage of the situation.
"People should not rely on any new forgiveness programs that would be announced," said Van Ostern.
3. Look for programs at the company that might help you make payments.
"If you lost your job or had your hours cut, you can enroll in an income-driven repayment program," said Van Ostern. "That will set your payment at a percentage of your income."