Which Federal Loan Servicer Is The Best

Student loans are a reality for many Americans. Over 43. The average debt of 2 million student borrowers is over $39,351 each. You must work with a student loan servicer if you have a federal student loan now or plan to get one in the future.

A student loan servicer is a business that the government hires to handle your loan repayments. These student loan servicers are the “middlemen” that collect and monitor your payments, even though the money you borrow is provided by the federal government. They must also assist you in managing your payments and provide you with the best guidance so that you can diligently repay your loan.

We’ll discuss the various federal student loan servicers in this article and how they stack up according to the most recent data (through 2021) from the Consumer Financial Protection Bureau, or CFPB. We’ll also discuss the potential reasons why your student loan servicer might alter in 2021 or 2022.

Can You Choose Your Student Loan Servicer?

Which Federal Loan Servicer Is The Best

When you first take out a federal student loan, you cannot pick your loan service. It’s not like getting a credit card or a car loan, where you can pick the lender you want to work with and decide where to borrow the money from.

There used to be 9 student loan servicers that the U.S. Department of Education works with to service federal student loans. However, one of these companies called Cornerstone (UHEAA) terminated its contract with the federal government in October 2020 effective immediately. Currently, there are 8 student loan servicers for federal direct student loans.

The level of service will vary depending on which student loan servicer you’re assigned to because these are all distinct businesses. Yes, you read that correctly. When you first obtain a loan, a student loan servicer will be “assigned” to you.

You have no choice but to accept the student loan servicer that has been assigned to you. Out of the eight student loan servicers recognized by the federal government, the only way to change to the one you prefer is through debt consolidation. Combining various federal student loans into a single new federal direct loan is the process of debt consolidation. By doing so, you may find it simpler to manage your payments and lengthen the loan’s term.

You might be reading this article because you want to consolidate your debts, among other things. You have the choice to change to a student loan servicer of your choosing while the consolidation process is underway. But if you’re just taking out a federal student loan for the first time, this won’t apply to you.

Big Four Federal Student Loan Servicers in the United States Ranked

Four businesses receive about 90% of the loans made by the Department of Education’s eight student loan servicers for federal student loans. The remaining four smaller student loan servicers each receive 10%.

The “Big Four” are the four businesses that receive the majority of student loans. The likelihood of dealing with one of these student loan servicers is obviously much higher if this is your first time applying for a federal student loan. The fact that these are the larger companies does not, however, automatically imply that they are superior.

To come up with our rankings, we looked at the total complaints filed by consumers to the CFPB Consumer Complaint Database from when data became available in 2015 up to 2021, in relation to the number of borrowers they have. Using the number of complaints available makes this ranking data driven, rather than subjective.

The Big Four will logically receive more complaints than the other four smaller servicers because the majority of the borrowers are concentrated with them. We therefore decided to list and rank the Big Four student loan servicers separately from the four smaller companies in order to make a (somewhat) fair comparison. The number of complaints can then be used as a benchmark to assess how each business performs. To make it simpler for you to see a snapshot of the available data, we have included screenshots from the CFPB Consumer Complaint Database. Note: this screenshot is static. The aforementioned link must be accessed in order to obtain dynamic data based on your selection.

Which Federal Loan Servicer Is The Best

Which Federal Loan Servicer Is The Best

Great Lakes Higher Education Corp.

Number of borrowers: 8 million approx.

Number of complaints: 1,042

Number of complaints per 100,000 borrowers: 13

Given that Great Lakes is the second-largest federal student loan servicer, it is surprising to see that there were only 13 complaints for every 100,000 borrowers. Even though Great Lakes is a flawed business, they still have a much lower rate of complaints than the other three major student loan servicers. Another intriguing statistic to take note of is the fact that Great Lakes continued to have no CFPB complaints in the first quarter of 2021.

Nelnet, Inc.

Number of borrowers: 6.6 million approx.

Number of complaints: 2,949

Number of complaints per 100,000 borrowers: 45

Nelnet is the smallest of the Big Four, with only 6 members. 6 million borrowers. The National Education Loan Network, or Nelnet, was established in 1978. Its headquarters are in Lincoln, Nebraska. Nearly 3,000 complaints were made against Nelnet in total, almost three times as many as against Great Lakes. 96 complaints were also made to Nelnet in the first quarter of 2021. Nevertheless, among the Big Four, it still has the second-lowest rate of complaints per 100,000 users.

AES/PHEAA (FedLoan Servicing)

Number of borrowers: 8.4 million approx.

Number of complaints: 7,366

Number of complaints per 100,000 borrowers: 87

AES, also known as FedLoan Servicing, services more than eight million federal student loans in the United States. 4 million student borrowers. With a total of 7,366 complaints, despite being the biggest, it is one of the student loan servicers that receives the most complaints. AES has already received 154 complaints in the first quarter of 2021.

Navient Solutions, LLC.

Number of borrowers: 7 million approx.

Number of complaints: 16,097

Number of complaints per 100,000 borrowers: 230

The third-largest student loan servicer, Navient Solutions LLC, serves roughly 7 million borrowers of student loans. Unfortunately for Navient, it is well known for receiving the most CFPB complaints. Navient logged 230 complaints for every 100,000 borrowers. That is a really bad number when compared to the Great Lakes, which has 13 per 100,000 borrowers. Navient already received an overwhelming 205 complaints in the first quarter of 2021.

Smaller Federal Student Loan Servicers in the United States Ranked

The Big Four companies service the majority of federal student loans; the remainder is divided among the other smaller student loan servicers. Up until one company (Cornerstone) terminated its contract in 2020, there were five smaller companies.

The remaining 10% of federal student loans are now managed by 4 small federal loan servicers. Due to the lack of data on the number of borrowers each servicer currently serves, we will rank them according to the quantity of complaints they have received.

Which Federal Loan Servicer Is The Best

Which Federal Loan Servicer Is The Best

OSLA (Oklahoma Student Loan Authority)

Number of complaints: 47

Oklahoma Student Loan Authority or OSLA is one of the most sought-after student loan servicers for federal student loans. Since 2015, it has only had 47 complaints filed to the CFPB. It also has an A+ rating from the Better Business Bureau. The advantage of having a smaller student loan servicer is that because there are fewer borrowers, you are likely to get better customer service.

Granite State Management & Resources

Number of complaints: 69

This small student loan servicer, also known as Granite State or GSM&R, is one that the Department of Education uses. Since its founding in 1986, the business has serviced both federal and private student loans. CFPB data show that since 2015, only 69 complaints have been filed against Granite State.

EdFinancial Services/ HESC

Number of complaints: 206

Knoxville-based EdFinancial Services is a business that was established in 1988. According to the CFPB’s data, it received 206 complaints, more than four times as many as OSLA did. It already had six complaints in the first quarter of 2021.


Number of complaints: 378

MOHELA is short for Missouri Higher Education Loan Authority. The bad news for MOHELA is that, out of the four smaller student loan servicers, it has received the most CFPB complaints, totaling 378. The first quarter of 2021 saw MOHELA receive 6 complaints, similar to EdFinancial.

Why Your Student Loan Servicer May Change In 2021

Which Federal Loan Servicer Is The Best

You cannot select the student loan servicer, as was stated in the preceding section. Unless you choose to use debt consolidation, you must continue working with the servicer to which you have been assigned. You will be switched to FedLoan Servicing, which manages this process, if you apply for Public Service Loan Forgiveness (PSLF), so you really don’t have a choice but to be switched to FedLoan. Refinancing your loan with a private lender is another choice, but keep in mind that you will forfeit any federal benefits, such as loan forgiveness and income-driven repayment plans.

There is still hope if you are unhappy with your current loan servicer but aren’t really interested in consolidating your debt. In the following two years, there is a very high likelihood that you will be moved to a different student loan servicer.

According to a Forbes article, the Department of Education announced in June 2020 that it has signed new contracts with 5 student loans servicers that will all eventually support federal student loan customers. While there will be 5 servicers, the goal of the Department of Education is to simplify the repayment process by using one platform for all borrowers.

These companies are:

  • EdFinancial Services LLC
  • F.H. Cann & Associates LLC
  • MAXIMUS Federal Services Inc.
  • Texas Guaranteed Student Loan Corporation (Trellis Company)
  • You might not notice any changes to your Navient, Great Lakes, Nelnet, or FedLoan student loan until the end of December 2021. While Granite State, OSLA, MOHELA, or EdFinancial student loan borrowers may not notice any change until 2022

    These upcoming changes could be good news for you or bad news if you’re assigned to a servicer that performs poorly, depending on your current student loan servicer. However, the new platform may help student loan borrowers with their issues.

    How To Deal With Your Student Loan Servicer

    No student loan servicer is perfect. Even if you are assigned to the best servicer, you might still run into problems later on. You can complain to the business or the CFPB, switch servicers through consolidation, or think about private refinancing if you are not happy with their service.

    It is advisable to hold off on consolidation or refinancing decisions until the new servicers take over in 2022. If your servicer is going to change without your intervention, you wouldn’t want to undergo the debt consolidation process or give up your federal benefits in refinancing.


    What federal loan is best?

    A subsidized loan is your best option. When you take out these loans, the federal government will cover your interest costs while you’re in college. Here are the types of student loans.

    Is MOHELA better than Nelnet?

    MOHELA. The Higher Education Loan Authority of the State of Missouri (MOHELA), which barely beat Nelnet to the top spot on our list of nonprofit federal student loan servicers.

    Who is replacing FedLoan servicing?

    As a student loan borrower, you may have already gone through a servicer transfer; generally speaking, everything goes without a hitch. Borrowers in this situation will be transferred to one of the following servicers because FedLoan will no longer be in charge of managing federal student loans: MOHELA, Aidvantage, Edfinancial, or Nelnet.

    Can you negotiate with FedLoan servicing?

    Federal student loan settlements are challenging to obtain but occasionally possible. The Department of Education has the authority to compromise or settle FFEL or Perkins Loans in any amount and to halt or stop their collection. It can be difficult, however to negotiate a “good” deal.