Federal Loan Transfer Scheduled for September – October 2011

The Department of Education is planning a transfer of federal loans to various loan servicers, including Great Lakes Educational Loan Services, Inc. The transition is part of a plan to have all of a borrower’s loans handled by one servicer, making it easier to manage your loan payments.

This transition is planned for two categories which are as follows:

“Rehabilitated/Reinstated loans with the Department of Education Student Loan Servicing Center”
Students who have loans which have been rehabilitated or reinstated currently have them serviced by the DoE Student Loan Servicing Center. These will be transferred to Great Lakes Educational Loan Services, Inc. and this transfer is scheduled for September 21, 2011.“Direct Loans and FFEL Purchased Loans Split Across Great Lakes and Other Servicers”
If you have federal loans which are serviced by Great Lakes, along with other services such as NelNet, your loans will be all be transferred to one servicer. For loans being transferred to Great Lakes, the transfer is scheduled for September 21, 2011. The transfer of loans to other servicers will commence upon the completion of step 1, which is tentatively scheduled for October 3, 2011.

The transition should make it easier for students to keep track of their federal loans, having only one servicer in the mix. After the loan transfer is complete and all necessary data is in the new servicer’s system, students will be contacted by the servicer with all of the information relating to your loans.

The borrower’s loan status should remain in tact through the transition. For example, any loans in deferment or forbearance will remain in deferment or forbearance. However, other services such as auto-debit or electronic correspondence will most likely need to be reinstated. If your loans are affected and you paid through auto-debit, make sure to contact your new servicer to set up this feature again so that you do not miss any payments!

For more information, read the announcement from the Department of Education. Contact information is provided on that page if you have any questions about the transition.

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