Savanna Hoffman
Before Nelnet, student loan borrowers made payments to a variety of entities, depending on the type of loan they had taken out. For Federal Family Education Loans (FFEL), borrowers likely paid a bank, lender, or non-profit organization. These loans were serviced by different companies, and borrowers would have made payments directly to those specific loan servicers. It is important to note that loan servicers are not the entities to whom the debt is owed; they merely facilitate the repayment process on behalf of the loan holder, which could be the federal government or a private lender.
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What You'll Learn
Commercial Federal Family Education Loan (FFEL) Program
The Federal Family Education Loan (FFEL) Program was a system of private student loans that were subsidized and guaranteed by the United States federal government. The program was initiated by the Higher Education Act of 1965 and ended on July 1, 2010, after a call from President Barack Obama to end the program, describing it as wasteful and inefficient.
The FFEL program offered four types of loans: subsidized Federal Stafford Loans, unsubsidized Federal Stafford Loans, the Federal PLUS Loan, and consolidation loans. The program was funded through a public-private partnership and administered at the state and local levels. During the 2007-08 academic year, the FFEL program served 6.5 million students and parents, lending a total of $54.7 billion in new loans, which accounted for 80% of all new federal student loans. Since its inception in 1965, 60 million Americans have used FFEL loans to pay for education expenses.
FFEL loans were originally borrowed from a bank, lender, or non-profit organization before July 1, 2010. Most FFEL Program loans are held by a guaranty agency or a commercial lender, and if the loan is not held by the U.S. Department of Education (ED), borrowers may not qualify for certain federal student loan relief programs. To determine if a loan is an FFEL Program loan, individuals can log in to their StudentAid.gov account and check the "Loan Breakdown" section. If a loan listing has "FFEL" at the front, it is an FFEL Program loan.
FFEL borrowers can gain access to loan forgiveness by consolidating their loans with the Federal Direct Student Loan Program. While payments made before consolidating typically do not count toward loan forgiveness, a limited waiver announced by the Department of Education in October 2021 allows FFEL loans to be consolidated with previous payments now considered qualifying payments. Additionally, most FFEL Program loans are eligible for only one income-driven repayment (IDR) plan, but borrowers can get more IDR options by consolidating their FFEL Program loan into a Direct Consolidation Loan.
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Banks
- PNC Bank: offers private student loans and refinancing options for existing federal student loans.
- Citizens Bank: offers private student loans for existing customers or borrowers who didn't graduate or aren't US citizens.
- SoFi: offers undergraduate student loans for those who want to borrow from an online bank.
- Sallie Mae: provides undergraduate student loans and savings accounts to help students grow their money.
Before July 1, 2010, federal student loans were borrowed directly from banks, lenders, or non-profit organizations. Since then, federal student loans have been borrowed from the government, and private student loans have become more common.
It is important to note that private student loans may not offer the same benefits as federal loans, such as income-driven repayment plans, deferment, forbearance, and loan forgiveness options. Therefore, it is recommended that students first explore scholarship, grant, and federal borrowing options before applying for a private loan.
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Lenders
Before Nelnet, you may have paid your student loans directly to the original lender, which could have been a bank, a lender, or a non-profit organization. This is the case if your federal student loans were borrowed before July 1, 2010, and are part of the Federal Family Education Loan (FFEL) Program. These loans are now serviced by Sloan Servicing, which provides customer service and support for borrowers with FFEL loans.
Nelnet is a student loan servicing company that specializes in consumer finance, telecommunications, and K-12 and higher education. They work with borrowers to manage and repay their federal student loans. If your student loan account number begins with a "D" or a "J," you would contact Sloan Servicing for assistance. On the other hand, if your account number starts with an "E," you would reach out to Nelnet.
It's important to note that Nelnet is just one of several student loan servicers operating in the United States. A student loan servicer is a company that handles the billing, collection, and customer service for student loans on behalf of the original lender. The specific servicer assigned to a borrower's loan may change over time, depending on various factors determined by the Department of Education.
If you're unsure about who your current student loan servicer is or who you previously paid your student loans to, you can check your loan records or contact the Federal Student Aid Information Center for assistance. They can provide you with up-to-date information about your federal student loans and direct you to the appropriate servicer or lender.
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Non-profit organisations
While federal loans are issued by the federal government, private non-profit student loans are still private loans, but they are issued by non-profit organisations. These loans are often only available to students within a particular state or region, and offer lower rates to in-state students. For example, Brazos Higher Education is a non-profit organisation based in Texas that offers low-interest loans with low or no fees to Texas residents or out-of-state residents attending a university in Texas.
There are also national non-profit organisations that offer student loan help, such as American Consumer Credit Counseling (ACCC), which assists with loan consolidation, loan cancellation, and choosing a repayment plan. Local non-profits may also be able to help with student loans and can be found by searching "student loan help near me".
It is important to note that some companies pretend to offer student loan assistance but are scams, so it is crucial to do your research before seeking help from any organisation.
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Sloan Servicing
Based in Lincoln, Nebraska, Nelnet is a student loan servicing company with over 7000 associates worldwide. It specializes in consumer finance, telecommunications, and K-12 and higher education.
There have been reports of issues with logging into the Sloan Servicing website, with some users reporting that they have had problems logging in since the website launched. Users have also reported issues with the website randomly deciding not to work, particularly when a payment is due. To avoid this issue, some users have suggested setting up autopay from a checking account.
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Frequently asked questions
You would pay your student loans to studentaid.gov.
You would pay Sloan Servicing.
Sloan Servicing is a customer service provider for commercially held Federal Family Education Loan (FFEL) Program loans.
FFEL loans were borrowed from a bank, lender, or non-profit organisation before July 1, 2010.
