"When student loan servicers change hands, the transition can lead to major headaches - just ask Annie Nova in New York City. Nova is a reporter for CNBC, and since finishing grad school in 2017, had been making loan payments to Nelnet, her student loan servicer, until her loans were suddenly transferred to a new servicer. She discovered they'd been placed in administrative forbearance - even though she'd never asked for a pause. That meant her balance could quietly grow as interest accrued. (1)"
"It's standard practice for student loan servicers to place your federal loans into administrative forbearance during the transition from one servicer to another. Typically, the status lasts for up to 60 days. (2) The goal is to give borrowers some time to find out about the transfer and take appropriate action, but because the Department of Education doesn't always clearly communicate when or why these pauses occur, many borrowers don't realize they're accruing extra interest until they log in and check."
When federal student loan accounts move from one servicer to another, servicers commonly place loans in administrative forbearance for up to 60 days. During that pause borrowers may not owe payments but interest typically continues to accrue, increasing loan balances quietly. Some borrowers avoid extra interest by making payments immediately after transfer or contacting the new servicer to confirm repayment status. Large-scale transfers have affected millions in recent years, increasing the risk of unnoticed interest charges. Borrowers should monitor accounts after transfers, verify payment schedules, consider making early or extra payments, and document communications with servicers.
Read at Moneywise
Unable to calculate read time
Collection
[
|
...
]