No, FedLoan and Granite State borrowers don’t have to do anything to get their student loans transferred to a new servicer

While there is some basic housekeeping you should do to help keep the transfer smooth, the Education Department will handle the transfer itself.

Both FedLoan Servicing and Granite State announced in July they would stop servicing federal student loans when their current contracts expire in December. The Department of Education’s Federal Student Aid office announced student loans serviced by the companies would be transferred to new servicers — EdFinancial Services for Granite State borrowers and an as of yet unnamed servicer or servicers for FedLoan Servicing.

Millions of borrowers use the two servicers, including every borrower in the Public Service Loan Forgiveness (PSLF) program, which meant the subreddits for the PSLF and student loan communities erupted with questions and concerns about the looming transfer and what they would need to do. Borrowers on other online communities, such as Instagram, have expressed similar concerns and sought out posts giving advice on navigating the process.


Will I have to do anything to get my student loans transferred from one servicer to another?



This is false.

No, you will not have to do anything to transfer your student loans from one servicer to another. There is some housekeeping you should do to make the transfer as easy as possible for you, however.


An Education Department spokesperson confirmed borrowers will not need to take any action to transfer their federally owned student loans from one servicer to another. 

“There isn't a lot of action required by borrowers who are going through a servicing transfer,” said Kristen Evans, section chief for the Office of Students and Young Consumers for the Consumer Financial Protection Bureau. “Just make sure your contact information is up to date, read all your notices and then set up your account with your new servicer.”

Updating contact information is an important first step for borrowers because the FSA says it will send an email, a letter or both when it transfers someone’s loans from one federal loan servicer to another. Then after receiving a transfer notice, Evans says it’s important for borrowers to download or print any documents or statements from the old servicer’s website.

Doing this helps borrowers protect themselves if there are any errors during the transfer. While the Education Department is working directly with servicers to make the transition seamless for borrowers, according to both Evans and the department’s spokesperson, errors have been an issue in previous mass transfers between servicers. A report from the SBPC and AFT found that a 2014 transfer of millions of loans resulted in 5 million servicing errors affecting more than a million borrowers.

Evans recommends borrowers double-check their balance hasn’t changed, they’re enrolled in the same payment plan and all of their loans have transferred over. If there are issues, borrowers can reach out to the Department of Education or the CFPB for help.

Before borrowers can check everything, they first have to set up an account with their new servicer. Evans said the first notice typically tells borrowers how long the transfer process will take, and after that process is complete the borrower’s new servicer will reach out to confirm the loans have been transferred and give directions on setting up a new account. The FSA says borrowers will have to restart any automatic payments they may have had with their previous servicer.

But the FSA says the status of borrowers’ loans, such as deferment or forbearance, will transfer over. The Education Department spokesperson clarified this includes COVID-19 emergency measures suspending payments and reducing interest rates to 0%. The spokesperson also said this transfer won’t impact any existing loan forgiveness borrowers were eligible for with their previous servicer.

Borrowers who don’t receive a transfer notice immediately shouldn’t panic — even if they don’t receive one before their current servicer’s contract ends in 2022.

“No borrower should experience a gap in service because of the transfer,” Evans said. “These servicing transfers can happen anytime between now and all through next year, 2022. So the Department of Education has scheduled a series of servicing transfers to space them all out, just to ensure that there's a smooth transition for these borrowers. So you may get that notice now, or you may get it a couple months from now or well into 2022.”

Currently, only borrowers with FedLoan Servicing and Granite State should expect transfer notices. Evans said anyone else receiving notices may be getting targeted by scammers. The Department of Education and the servicers themselves will announce any future planned transfers as needed.

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