If You Have A Student Loan, Now Is The Time To Keep An Extremely Close Eye On It

If You Have A Student Loan, Now Is The Time To Keep An Extremely Close Eye On It

The US Department of Education is streamlining its roster of companies that work on federal student loans.

The plan is to condense 11 servicers into five.

The five servicers are EdFinancial Services, F.H.

Cann & Associates, Maximus, MOHELA, and Trellis Company.

If your loan is already with one of these five institutions, the change in policy should have no impact on your account.

If not, Business Insider reports there's a far higher risk of errors in accounts caused by the transition--and ultimately a greater risk of defaults by borrowers.

Student loan expert Travis Hornsby says that the companies chosen are also used to servicing defaulted loans.

Three of those five companies are collections agencies, and most of their student loan work is in the default space.

Travis Hornsby Founder, Student Loan Planner