The Office of Federal Student Aid awarded new contracts to five loan servicers—a key milestone in the Education Department’s years-long effort to modernize its student loan system.
The department is planning to launch the first phase of the modernization next year. The overhaul would eventually centralize the student loan servicing system through one website. Currently, each servicer maintains its own website and servicing systems. During the first phase, borrowers will be able to use their Federal Student Aid IDs to log on to the servicers’ websites. The five servicers also will have to co-brand their communications with Federal Student Aid and maintain similar websites.
