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Latest from FSA: Department of Education Makes Changes to Federal Student Loan Servicing

September 6, 2014

The Department of Education recently announced changes that are being made to strengthen federal student loan servicing, including the renegotiation of contract terms with servicers. These terms are meant to create additional incentives for servicers to focus on effective counseling and outreach to ensure borrowers select the best repayment option for them and on enhanced customer satisfaction for student and parent borrowers at all stages of the student loan life cycle. These incentives include:

  • Revised performance metrics that increase the weight of the existing borrower customer satisfaction survey from 20 percent of the overall score to 35 percent.
  • A payment structure that focuses on servicers’ success in keeping borrowers in on-time repayment status and helping borrowers avoid default.
  • Additional incentives tied to each servicer’s success in reducing delinquency in payments across their portfolio.

In the coming weeks, FSA will announce opportunities to hear directly from student loan borrowers and stakeholders about their ideas for improving the federal student loan program. This feedback will be used to make recommendations for helping struggling borrowers. The Department will also soon begin the process to allow more borrowers to cap their payments at ten percent of their monthly incomes under an expanded Pay As  You Earn repayment plan option.

For further details, please see the Department of Education’s original announcement:


Kristin Tobias, Communications Coordinator, Nelnet

Kristin Tobias, Communications Coordinator, Nelnet


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