Loan Servicer
A company contracted by the Department of Education to manage the billing, repayment, and customer service for federal student loans on behalf of borrowers.
Detailed Explanation
Loan servicers are the intermediaries between federal student loan borrowers and the Department of Education. They handle day-to-day loan management including sending monthly bills, processing payments, managing enrollment in repayment plans, processing deferment and forbearance requests, and tracking progress toward forgiveness programs like PSLF. Current major federal loan servicers include MOHELA, Aidvantage, Nelnet, and EdFinancial. Borrowers do not choose their servicer; they are assigned when the loan is disbursed. Servicer quality has been a persistent issue in the student loan system, with the Consumer Financial Protection Bureau and Government Accountability Office documenting widespread problems including incorrect payment processing, poor customer service, and failure to properly credit payments toward forgiveness. Borrowers should regularly verify that their servicer is correctly processing payments and tracking their repayment plan status. Servicer contact information and loan details are available on studentaid.gov. In recent years, the Department of Education has consolidated servicing contracts and implemented new accountability standards for servicers.
Related Terms
Federal Student Loan
A student loan funded by the U.S. Department of Education with fixed interest rates, flexible repayment options, and potential forgiveness programs.
Income-Driven Repayment (IDR)
Federal loan repayment plans that cap monthly payments at a percentage of discretionary income and forgive remaining balances after 20 or 25 years.
Public Service Loan Forgiveness (PSLF)
A federal program that forgives remaining student loan balances after 120 qualifying monthly payments while working full-time for a qualifying public service employer.
Loan Forgiveness
The cancellation of some or all of a borrower's student loan balance, available through programs like PSLF, IDR discharge, or targeted relief initiatives.
Source: U.S. Department of Education College Scorecard, 2026.
Frequently Asked Questions
What is loan servicer?
A company contracted by the Department of Education to manage the billing, repayment, and customer service for federal student loans on behalf of borrowers.
Why does loan servicer matter for college ROI?
Loan servicers are the intermediaries between federal student loan borrowers and the Department of Education. They handle day-to-day loan management including sending monthly bills, processing payments, managing enrollment in repayment plans, processing deferment and forbearance requests, and tracking progress toward forgiveness programs like PSLF. Current major federal loan servicers include MOHELA, Aidvantage, Nelnet, and EdFinancial.
this entity is one of the U.S. college cost, debt, and post-graduation earnings concepts that recurs across this site. The definition above is the technical answer; the paragraphs below add the practical context for how the concept connects to the the U.S. Department of Education College Scorecard data behind every per-entity page on the site.
In the the U.S. Department of Education College Scorecard data, this concept shapes one or more of the fields that drive the per-entity grades and rankings on this site. The methodology page describes which fields feed into which output; this glossary entry documents the underlying term.