Students who borrow money from GW will now manage their loans through a new third-party contractor.
Heartland ECSI became GW’s new loan servicer April 1, after Conduent, the previous provider, notified GW last summer that the company would pull out of its contract with the University because it would no longer manage a popular federal loan program. Experts said the change likely won’t impact students drastically, but may cause minor inconveniences because students are not able to access their financial information online during the transition period.
University spokeswoman Maralee Csellar said Conduent notified the University that it opted to stop providing the services necessary to manage Perkins loans, which allow universities to lend federal funding to students with financial need. She said officials decided to switch to Heartland ECSI “after researching other options,” but declined to say when the decision was made.
“ECSI will continue the same payment plans which borrowers are currently using and borrowers should not experience any significant changes because of the switch in providers,” Csellar said in an email.
About 2,300 undergraduates – one-fifth of the undergraduate student body – received Perkins loans this academic year. The popular federal program has already expired and will likely be phased out by next academic year, leaving officials considering other options to meet the gap in financial need.
She said Conduent, which was formerly called ACS Student Loans, notified borrowers of the change and the financial aid office has been responding to students and alumni who contacted the University with questions. She said the financial aid office “continues to work with both companies to ensure a smooth transition.”
But an alumna, who spoke on condition of anonymity because her employer does not allow her to speak to the media, said she wasn’t notified of the change until after the switch went into effect, creating confusion over how she would pay back her student loans with the new company.
The alumna said she received an email from Conduent April 3 – after the company had already started working with GW – notifying her of the change in providers, which she hadn’t been previously notified about by GW or the new servicer. She said the lack of notice for the change left her confused about the status of her loan as the providers switched over.
She said she inquired about the switch with the financial aid office and officials told her that Conduent notified the University last summer that they were ending the contract. A financial aid officer told the alumna that the new provider started working with GW April 1 and plans to send letters to students informing them of the switch this month, according to an email obtained by The Hatchet.
The official said in the email that because the shift is still in its early stages, students can only pay off their loans by sending a check to the new provider because the online system isn’t set up yet. But for students on a quarterly repayment plan, the next payment is not due until June 1, the email states.
“I haven’t gotten any mass email about this from anyone else, so I just think it’s ridiculous that they didn’t tell anyone after all this time that they knew about it,” the alumna said in an interview.
Both Conduent and Heartland ECSI did not respond to requests for comment.
Financial aid experts said students likely won’t notice a huge difference in the way their loans are managed between providers, though they should take care to ensure all of their information is properly transferred during the switch.
Danae Newman, the associate director of financial aid at Georgetown University’s law school, said the biggest issue a student borrower may face when they switch loan providers is ensuring that all of their information and their proper repayment plans are carried over to the new servicer.
“That is an issue if it does not get transferred over and a lot of students, they sometimes don’t even worry about it and just expect that it’s just going to magically happen correctly,” she said.
Jan Miller, the founder of Miller Student Loan Consulting, a company that provides student loan advice to borrowers, said that in his experience working with both Conduent and Heartland ECSI, the new provider has supplied borrowers with better customer service and recently revamped its website to take online payments, a previous shortfall for the company.
He said the way students manage their loans likely won’t change since the loan servicer typically acts as a intermediary between students and officials to give students an outlet to answer questions and address technical problems. The University always has the final say on how loans are dispersed or managed – which will not change in switching loan providers, he added.
“Schools – they know how to get people into debt,” Miller said. “They’re clueless as to how to manage a loan.”