Smart Borrower Blog

New System to Simplify Federal Student Loan Experience

Jul 27th, 2016 @ 8:08 PM by Amber Nelson

Last week the U.S. Department of Education laid out a new system to make repaying federal student loans a smoother process, a fulfillment of its directive from the March 2015 Student Aid Bill of Rights.

Since 2015, the DOE has been surveying borrowers, student loan industry players and consumer advocated to find out how to make student loan repayment a more stress-free experience. From all the feedback they received, the DOE has decided to create a single loan servicing “ecosystem” that will be the only point of contact for borrowers when making payments. To this point there have been 11 different federal loan servicers, and trying to deal with several different ones for different student loans has been a major point of confusion for borrowers.

Under the new “ecosystem,” there will still be 11 different loan servicers, but they will essentially be invisible to borrowers as those with student debt will now go to just one DOE-sponsored web portal to make payments on all federal loans no matter who services them.

The DOE loan “ecosystem” will also include extended call center hours to be more available to borrowers. It will also improve account access (including the ability to access information from mobile devices) and expand payment methods. Additionally customer services practices will be standardized to make the experience more consistent across the board.

Complaints will also be handled by the central “ecosystem” with issues being acknowledged within 15 days and resolved within 60 days. The Federal Trade Commission, the Department of Veteran Affairs, the Consumer Financial Protection Bureau and the Department of Defense will all have access to the student loan complaint database as well.

There will also be greater transparency in all federal student loan data. The DOE will report things like servicer performance, individual account and overall loan portfolio characteristics and characteristics of borrowers in default.

And in order to help student debt borrowers repay their loans, when payment are submitted that are less than the minimum due, the “ecosystem” will apply them in a way that keeps the most loans current. When payments are submitted that are larger than the minimum due, the extra will be applied in a manner that will save the borrower the most money.

While it may take a few months and may require more regulation, the new DOE loan platform “ecosystem” is intended to reduce borrower confusion as well as minimize late payments and defaults.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to and

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