Student Loan Account Closed Due to Transfer: What It Means for Your Credit Score (2024)

There are a few reasons why your student loan debt was transferred:

The original creditor sold the loan to another company.
You applied for thePSLF Program.
See Also
Do you need to apply for private student loans every year of school?
You defaulted on your student loans, and they were sent to a collection agency.
You consolidated the loans into a Direct Consolidation Loan.
You refinanced your federal or private loans into a new loan with a private lender.

If you have federal student loans, your servicer may change due to a contract ending between the U.S. Department of Education and your current servicer.

The department is in the process of moving millions of student loan borrowers to new servicers after FedLoan Servicing and Navient announced during the pandemic that they wouldn’t be renewing their contracts.

In the past, moving borrowers to new companies was often chaotic and error-prone. But the currentstudent loan pause extension, which is set to end this May, has given the department time to try to minimize mistakes.

Moving to a new servicer when your account is in good standing won’t change your interest rate or loan balance. And you’ll still have access to the same repayment plans, options to pause payments with deferment and forbearance, and student loan forgiveness programs. Here’s what to do if you’ve had astudent loan servicer change.