A Direct Federal Student Loan Will Be Easier to Keep Track of
by Rob
(Terre Haute, Ind.)
Getting a direct federal student loan will make it easier to keep track of which loan servicer is holding the loan. Many times, lenders sold federal loans so that by the time students graduated, they had no idea who their lenders were. This made it difficult to know payment due dates and amounts that were owed.
One loan servicer who will stay with the loans will make it less likely for people to default because of accidental mistakes. Most students wait for someone to contact them about their loans and if this doesn't happen, they do nothing.
And even if whoever gets the contract tries to mess things up for borrowers, the Department of Education will be watching and graduates can complain about bad service. Before, there was not much a borrower could do if a lender didn't have forms they needed, or if they said they didn't get them when they were filled out. ==================================================
The loan servicers for Direct loans are mostly the largest FFELP lenders (who have the necessary resources). The Department of Education does send out feedback surveys (quarterly) on how schools and borrowers feel they are doing. This is the accountability and quality assurance model so far. Whether the loan is an FFELP or a federal Direct student loan, any borrower can find out who holds their loan by going here:
