The Department of Education's decision to consolidate federal student loan servicing from five companies down to three has created widespread confusion among borrowers, with millions reporting lost payment histories and incorrect balance information.
Consumer advocacy groups have logged over 120,000 complaints since the transition began in March, with many borrowers discovering their autopay settings were not transferred and that payments were misapplied to the wrong accounts.
The Department has extended a 90-day grace period during which late fees and negative credit reporting will be suspended while the transition issues are resolved.
