On Wednesday, the Education Department confirmed a major revamp of the federal student loan servicing system. They outsource the management of its vast federal student loan portfolio to several third-party companies known as student loan servicers.
Student loan servicers
The United States Department of Education is pushing for federal student loan servicing adjustments. Published Request for Information last week implying that it will start onboarding student loan servicers under a new Unified Servicing and Data Solution (USDS) system.
In addition, the department hopes to implement a “more stable, long-term servicing environment that provides student loan borrowers with a better experience” by making the transition from federal student loan servicing to this new system, MSN posted.
The overhaul of federal student loan servicers is part of the department’s bigger “Next Gen” program in 2017. Along with onboarding new servicers, the department aims to enable borrowers to use their FSA ID to access all servicer websites. Furthermore, it combines access to Public Service Loan Forgiveness, total and permanent impairment discharge, and TEACH subsidies into a single Federal Student Aid hub rather than specific services. As a result, all account management and student loan repayment are combined into a single Federal Student Aid online portal.
More about ‘Next Gen’ FSA
They confirmed the Next Generation Federal Student Aid (Next Gen FSA) action plan in December 2017, which takes significant steps toward finding better ways students, parents, and borrowers engage with and access the advantages of Federal Student Aid programs.
This year, they made significant progress and are expected to make even more with each new release. The goal is to make the web and mobile experiences more intuitive and provide you with various tools to assist you in managing your student aid journey. To achieve this goal, they provide you with easy-to-understand, timely information at critical points along the way.