The Department of Education’s Federal Student Aid is planning to release “an entirely new federal student loan servicing environment” in 2024, according to FSA’s chief operating officer, Richard Cordray, who laid out the changes that are coming in a blog post yesterday.
Borrowers who make payments online will begin seeing changes this month, Cordray said, and more changes are coming throughout the year. The objective is to improve the consumer experience for the 38 million individuals with federal student loans and to bring together StudentAid.gov and the sites used by student loan servicers into one single sign-on for users.
Along with updating its own sites, Cordray said that the companies servicing federal student loans are making updates of their own, to make them easier to use and to improve consistency from one site to another. The changes will also make it easier for the Department of Education to hold servicers accountable and drive them to keep borrowers current rather than in forbearance or deferment, Cordray wrote.
Loan servicers will even be changing the suffixes of their websites and email addresses to .gov from .com to help individuals distinguish legitimate information from scams.
The final objective is to have everything a borrower needs be available on his or her account at StudentAid.gov rather than on servicers’ websites, according to Cordray. The changes are possible because of new contracts that Federal Student Aid has awarded to loan servicers that will allow it to modernize the experience for all borrowers.
“The new environment, known as the Unified Servicing and Data Solution (or USDS), will improve the experience and repayment outcomes for 38 million federal student loan borrowers,” Cordray wrote. “It also will enable FSA to provide tighter oversight of loan servicers and better safeguard borrowers’ personal information through higher cybersecurity standards.”
