Top five things to look for in a student loan servicer

Tuesday, June 11, 2024

Student loan servicing is one of those things that just runs smoothly in the background—until it doesn’t. Recent turbulence in the student loan servicing industry has revealed backlash for billing errors, mismanagement of accounts, and inadequate customer service, all of which can negatively impact borrowers' financial well-being and an institution’s reputation.

How can institutions trust that their borrowers’ campus-based loans are handled with compliance and expertise? Here are five things institutions should look for when partnering with a student loan servicer.

1. Proactive Compliance

With increasing scrutiny around student loan compliance, institutions and their servicers must be at the forefront of ever-changing regulations. A premier student loan servicer not only complies with state and federal regulations but proactively scans the horizon for changes, updates its systems and processes to address those changes, and notifies clients and borrowers.

An experienced servicer brings a deep understanding of the complex student loan landscape, including various repayment plans, forgiveness options, and regulations. This knowledge allows clients to remain compliant and support borrowers as they navigate their repayment journey.

in-house compliance team monitors both national and state laws and informs our clients of new and upcoming regulations, such as Know Before You Owe and Regulation F. With a trusted loan servicing partner, institutions won’t be caught off guard when new regulations roll out and won’t have to scramble to ensure loan portfolios are managed correctly.

2. Reputation and Experience

The Federal Perkins Loan Program, which is the largest campus-based student loan program in the United States, brought many loan servicers to the market. But when that program sunset in 2017, servicers that couldn’t pivot or provide exceptional service began to exit the market. Institutions should be thoughtful about partnering with a servicer that can weather the changes in the higher education industry.

For the benefit of both the institution and its students, a college or university must assess the reputation and track record of its loan servicing partner. A servicer with a history of reliable customer service, efficient processing, and transparent communication is essential to protect the institution and support their borrowers. Institutions should ask their loan servicer about their higher education experience, history and longevity, and additional support that would allow a servicer to remain a trusted resource for years to come.

3. Customer Service

One of the largest loan servicing complaints from both borrowers and institutions is poor customer service. Borrowers often report difficulties in receiving prompt service and obtaining transparent, accurate information about their loans. Long wait times and lack of transparency can lead to frustration and mistrust among borrowers, making it even more difficult for them to manage their debt effectively.

The right loan servicer will align with an institution’s commitment to prioritizing student success, adhering to ethical practices and demonstrating a dedication to helping students manage their debt responsibly.

Partnering with an experienced student loan servicer can provide institutions with peace of mind, knowing their alumni are well supported as they navigate life outside of the classroom.

Similarly, an institution’s staff should receive prompt customer service, guidance, and ready access to the software and reporting they need to manage loans at the campus level. Institutions should know their servicing partner contacts by name, with a clear path to escalate and resolve any issues.

4. System Access and Reliability

A servicer is only as strong as the technology and aid provided. Institutions need a servicer with a secure, dedicated software environment, robust reporting, 24x7 system access, ticketing software, and secure live chat functionality. Institutions need a reliable system that provides the ability to review all borrowing information, access comprehensive reporting, print electronic bills, and more.

ECSI’s student loan servicing platform provides 24/7/365 system access with real-time processing for institutions and their staff. It’s a complete student loan tracking, billing, and collection system designed to accommodate any type of student loan or payment plan.

5. Range of Service

Institutions should evaluate the range of services offered, and select a servicer that provides comprehensive support for institutions and their students. Just a few of the services to look for include:

  • Federally required system updates & enhancements Data backup & disaster recovery
  • Borrower, client & collection agency website maintenance
  • Grace audit notices at 90, 150 & 240-days into a grace period
  • Annual statement of account letters for ACH
  • Monthly billing statement and past due notice creation & mailings
  • 60-day final demand letters, pre-acceleration, and post-acceleration notifications
  • Courtesy borrower emails for payment reminders, payment confirmations, entitlement processing, NSFs, etc.
  • In-school student deferment processing & audit statement generation via the National Student Clearinghouse
  • Monthly credit bureau reporting
  • Monthly NSLDS reporting and error-correction services
  • Data interface file processing for awards, new loans, separation files, holds on transcripts, etc.
  • Document imaging and storage for all checks, remittance statements, entitlement forms, etc.
  • Auto agency placement and recall at all placement levels
  • E-sign promissory note services (with Regulation Z)
  • Online exit interview counseling

For more than 50 years, ECSI has been the gold standard for campus-based loan servicing in higher education. Our proprietary loan servicing solution is customizable to meet the needs of your institution, no matter how large or small. ServicingSelect from ECSI simplifies loan servicing, reducing administrative workloads by automating tasks, streamlining paperwork, and handling customer service. And it does it all while ensuring compliance and providing students with the experience they deserve. ECSI can also take on the Government Assignment process for institutional Perkins Loans.

Explore the perks of partnering with the industry’s leading student loan servicer and put some expertise in your corner. Schedule a call, today.