The Best Federal Student Loan Servicers in 2023

We rank the best student loan servicers so you know which student loan servicer is best and which one is not in 2023.

We rank the best student loan servicers so you know which student loan servicer is best and which one is not in 2023.

Getting a federal student loan is a must for most college students. Aside from the fact that it offers low-interest rates, the payment options are also more flexible and manageable. Unfortunately, the federal government does not allow students to choose their own loan servicers, or the companies responsible in managing the students’ loans.

Once a student applies for a federal loan, he will immediately be assigned to a private loan servicer. The student can be appointed to any of the existing servicer companies in the United States. Once assigned, the servicing company will take charge in managing payments, providing options, and giving overall support for the student loan holder.

Lender vs. Servicer

Some people get confused and use these two terms interchangeably, when, in fact, these are two different entities related to federal loans. The lender is the entity responsible for providing the credit to the applicant to be used for higher education fees. Meanwhile, a servicer is a private company tapped by the US government to manage the existing student loans of students.

This means that a student who applies for a federal student loan only needs to contact the Federal Student Aid once and then send an application. Once approved, it will assign the student to a servicer.

The student should then remain in constant communication with his federal loan servicer to work with him in providing servicing plans, helping in loan consolidation, and assisting in different tasks related to the loan.

Federal Loan Servicers in the US

If you are an incoming college freshman and you want to get a federal student loan, you better be ready and know the possible loan servicers that may be assigned to you. Below are some of the most popular loan servicers for student loans. Because you’ll never know which of them will manage your loan, it will help to understand more about them:

  • Great Lakes: Great Lakes is one the best student loan servicers because they have great customer service, efficient payments and even offer a number of unique repayment options.
  • Oklahoma Student Loan Authority (OSLA): OSLA is a great loan servicers because they offer highly competitive rates and flexible repayment programs.
  • Granite State Management & Resources: Granite State Management & Resources is well known for their student loan repayment programs and excellent customer service.
  • Higher Education Services Corporation (HESC) or EdFinancial Services: HESC or EdFinancial Services is a great student loan servicer because they offer competitive interest rates, innovative repayment plans and world class customer service.
  • Utah System of Higher Education/Cornerstone: Utah System of Higher Education/Cornerstone is a well-known and trusted student loan servicer because they offer competitive rates, personalized customer service and even have a number of unique repayment options.
  • Nelnet: Nelnet is a highly-trusted student loan servicer because they have excellent customer service and flexible repayment plans.
  • Higher Education Loan Authority of the State of Missouri (MOHELA): MOHELA is one of the best student loan servicers because they have unbeatable customer service, highly competitive interest rates and innovative repayment programs.
  • FedLoan Servicing: FedLoan Servicing is one of the best student loan servicers because they have excellent customer service, a variety of repayment options and competitive interest rates.
  • Navient: Navient is one of the most trusted student loan servicers because they have great customer service, flexible repayment options and competitive interest rates.

About 90% of all federal student loans today are assigned to one of the Big Four servicers, which are Great Lakes, FedLoan Servicing, Navient, and Nelnet. Unfortunately, three of these servicers are also among the most hated according to complaint statistics. Navient, FedLoan Servicing, and Nelnet received 1,027 complaints per million serviced accounts during the previous year. You may have seen news about the Navient lawsuit, and that they are facing six lawsuits alleging illegally cheating borrowers out of repayment rights through shortcuts and deception.

Being assigned to Great Lakes will not be the perfect experience, either. However, as far as the other servicers are concerned, Great Lakes is your best bet for a service provider in the country. It only received 36 complaints per one million customers last year.

Aside from the Big Four, there are also five nonprofit servicers: Cornerstone, Granite State, HESC, MOHELA, and OSLA. These servicers vary when it comes to customer satisfaction, but the more favored ones seem to be OSLA, Granite State, and HESC. If you want to learn how to get in contact with your student loan servicer, you can see this post here.

Is There a Way to Choose Loan Servicers?

If you are fed up with the federal loan servicer assigned to you, you have the option to get another servicer. However, you can only do so by choosing any of the two options:

  • Consolidation – This will allow you to apply for a new student loan and combine it with your existing credit. It’s an option that lowers the monthly payments but extends the loan term. However, this will also require you to pay bigger interest over time.
  • Refinance – This will allow you to get a new student loan, but from a private lender. Your existing federal loan will be transferred to a private lender, such as a bank or a loan union. Remember that private lenders generally have higher interest rates and more strict payment schemes so it’s best to think about it.

Financial Management

Whether you’re assigned to a good-rated or bad-rated loan servicer, it is entirely up to you whether you’ll be able to cover the monthly payments or not. Some customers blame servicers when, in fact, it was entirely their fault that they failed to stay updated with their debts.

It will take discipline maintaining a good relationship with money, so you can dictate what it can do for you, and not the other way around.  Successful financial management cannot be achieved right away—it takes constant self-control to make paying off your loan a priority. Never treat your credit as a liability, but rather an investment for your education.

If you think you can’t handle federal student loans, you can always consider getting a scholarship. You can check with the college you are enrolling in, state and federal agencies, foundations, religious and education groups, or even your parents’ employers for opportunities. Most scholarships are merit-based or by achieving specific academic standards, while some are based on financial necessity.

Beat Student Loans
Beat Student Loans
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