Rankings

The following is the ranking of student loan servicers from best to worst. To learn more about these rankings, keep reading below:

  1. Great Lakes
  2. NelNet
  3. Not-for-Profit Servicers
  4. PHEAA (FedLoan & AES)
  5. Navient

Introduction

There is now over $1.4 trillion in outstanding student loan debt held by over 44 million borrowers in the United States today. 

With all of these student loan borrowers out there, there is an enormous need for customer service and support.

So who manages these millions of borrowers? 

It is not the government, as you may have guessed. Instead, after the government and private student loan companies originate the new student loans, they typically hire third party companies called student loan servicers. ​In total, there are 9 servicers that manage both federal and private student loans.

Servicers handle almost every aspect of student loans. They send bills, accept payments, and help borrowers when any issues arise. Borrowers can use their servicers to change payment plans, enter deferment or forbearance, apply for forgiveness, and more. In general, servicers are the go-to contact for anything related to student loan repayment.

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Servicers do notoriously catch a lot of heat for dishonest practices and for failing to help borrowers, however. At least a few times a year, a story pops up about a servicer unfairly optimizing for profit, harassing borrowers, or violating some other regulation. 

With all of the different servicers out there, and given the criticism they often receive, we thought it would be interesting to see how they stack up against each other in the consumers' eyes. 

Using the CFPB's Complaint Database, we determined how many complaints were filed against each servicer for 2016 so far (1/1/2016 - 12/15/2016). In total, 5,344 student loan servicer complaints were analyzed. To normalize the results, we divided the number of complaints by the number of borrowers that each servicer manages. In addition, we reported the total number of complaints made against each servicer for federal student loans, private student loans, and both combined. 

Results

Complaints Against Servicers About Federal Student Loans Per 100,000 Borrowers

The following table shows the complaints made about federal student loans per 100,000 federal student loan borrowers ​made for each of the 4 largest servicers, as well as all 5 of the not-for-profit servicers. The not-for-profit servicers include MOHELA, EdFinancial/HESC, CornerStone, Granite State, and OSLA Servicing.



Total Student Loan Servicer Complaints for Federal & Private Student Loans

The following table shows the complaints made against each servicer regarding all types of student loans - both federal and private. Note: in this table, each of the not-for-profit servicers was analyzed separately.



Analysis

On average, only 1 out of every ​10,585 borrowers made a complaint to the CFPB about his or her servicer (assuming there were not multiple complaints made by one person). Though this may seem pretty low, it only includes complaints made to the CFPB. Many borrowers may have filed a complaint somewhere else, or not at all, when they ran into trouble. 

It is not schocking that Navient leads the list in complaints per borrower. They have had numerous violations and lawsuits over the past few years. In 2015, the company had to pay $97 million to the Department of Education, Department of Justice, and the Federal Deposit Insurance Corporation for charging extra fees to military members. To make matters worse, in August of 2015, the CFPB alerted Navient that they were considering pursuing legal action for misleading servicing practices. Aside from those two cases, the company has faced a number or smaller lawsuits and allegations that have done little to improve its reputation. 

It is surprising to see that the not-for-profit servicers were third on our list of complaints per 100,000 borrowers. Because these companies are not profit-driven, it seems that they would be less likely to harass borrowers or engage in dishonest practices. This appears to not be the case, however, in our analysis. Out of the five not-for-profit servicers, nearly half of the federal complaints were made against MOHELA. We predict that some of the smaller not-for-profit servicers would rank at or near the top of the list if they were not all grouped together. Note: we did not break up these servicers because we only had data for the number of borrowers for the group as a whole. 

Another interesting statistic that we found is that, despite private student loans making up only around 10% of the total student loan market, ​42% of all complaints against servicers were made regarding private student loans. Private student loans are often seen as more risky for borrowers, as they typically have higher interest rates and less benefits. While the government offers many perks - such as deferment & forbearance protections, forgiveness, and income-driven repayment plans - private lenders usually aren't so generous. Private student loan borrowers may have complained more due to private lenders' limited repayment plans and options for those who are facing hardship, among other reasons. It should be noted that private borrowers do have the option of student loan refinancing and consolidation, though it is tough to qualify for. 

​Finally, we were very surprised to see the OSLA Servicing had 0 complaints. Though this may be because the company has exceptional customer service and gives its effort to help borrowers, it is unusual to see even the best student loans company receive no complaints at all due to the nature of the business. We are eager to see how OSLA fares in 2017. 

Methodology

We analyzed all complaints made to the CFPB from 1/1/2016 to 12/15/2016. In total, there were 177,293 complaints - 5,344 of which were made against student loan servicers. 

​The number of borrowers that each servicer manages was pulled from the Department of Education's Federal Student Aid site. We included all student loan borrowers that each servicer manages - including those who are still in school, in their grace periods, in repayment, in deferment, and in forbearance. 

To get the complaints per borrower for federal student loans, the total number of complaints about federal student loans was divided ​by the total number of federal student loan borrowers for each servicer. To make the data more presentable, the complaints per borrower was multiplied by 100,000, giving the total number of complaints per 100,000 borrowers. 

It should be noted that the CFPB does not confirm the accuracy of each complaint. Complaints against servicers were found in the Student Loan and Debt Collection categories.