This allows the lender to transfer its legal responsibility to a new owner. The original lender will then use the funds obtained from the sale of the loan to make new educational loans to other students. Your lender will notify you if your loan is transferred to a new lender or a loan service. Your lender may contract to a servicer to act on its behalf to collect payments on your loan. When this occurs, you should then contact the loan servicer if you have repayment questions.
Many students move after leaving school.
It's very important that you keep your lender of servicer informed of your most recent address and phone number. This way your lender can send you information on repayment or inform you where to send payments if your loan is sold or transferred. Your student loan is an excellent way to build a good credit history. If you fail to make payments on your student loan, your loan goes into default. This means that you have not kept current with your loan obligations.