The good news for current Wells Fargo customers is that the changes will be a small hassle rather than a major issue in most cases.

Some borrowers may also have the opportunity to eliminate any inconvenience.

Changes Coming for Wells Fargo Borrowers

Wells Fargo is selling all of their student loans to investors. Firstmark will service the student loans.

Wells Fargo has not announced a specific date for the move, but they will stop accepting all student loan applications starting January 21st, 2021.

From the borrower’s perspective, this transfer means no more bills from Wells Fargo. Instead, Firstmark will handle all student loan questions, billing, and issues.

However, loan terms and conditions will not change. The move should not impact interest rates or the amount due each month.

Preparing for the Move from Wells Fargo to Firstmark

If I were a Wells Fargo customer, I would take the following steps:

• Cancel any automated payments – Some people schedule monthly payments from their bank to Wells Fargo each month. Others authorize Wells Fargo to withdraw their payment each month automatically. Borrowers should cancel both services. The payee information for auto banking payments will change, and there is no reason for Wells Fargo to have continued banking account access or information.
• Update my contact information with Wells Fargo – During the transition, Wells Fargo may send important letters or emails. Missing any critical information could lead to a missed payment and potentially late fees or negative credit reporting. Up to date contact information helps prevent any issues.

Ultimately, the process amounts to an inconvenience for borrowers. You will need to monitor the transition to make sure you never get charged twice and make sure that you don’t skip a monthly payment.

It isn’t ideal, but it isn’t a catastrophic situation in most cases.

The Big Potential Downside to Borrowers

A borrower’s lender and servicer can have a considerable impact on their student loan experience.

In most cases, the impact amounts to nothing more than the company that receives a payment each month.

However, for borrowers who are struggling, the student loan companies have a huge impact.

Wells Fargo is a major bank. They have spent millions on advertising to improve their reputation with customers. For student loan borrowers, this means Wells Fargo may have an incentive to work with borrowers who are struggling. Even though the loan contract doesn’t require extra help, lenders sometimes find a way to accommodate borrower needs.

The shift to Firstmark servicing on loans owned by investors could mean less flexibility. In previous research on Firstmark, I found borrower complaints about Firstmark’s lack of flexibility and help. The outside investors may not care if consumers hate them. They may instruct Firstmark to strictly enforce all terms of the loan contract.

Stopping the Loan Transfer to Firstmark

Many borrowers may want to prevent the move to Firstmark.

After all, the contract they signed was with Wells Fargo. Can’t borrowers prevent the sale to investors or move to Firstmark?

Unfortunately, it is almost certainly impossible for borrowers to stop Wells Fargo. The selling of debt from one lender to another is standard business procedure.

I haven’t personally reviewed any Wells Fargo student loan contracts, but I would be shocked if any provision allowed borrowers to prevent the transfer.

The only realistic shot for borrowers to prevent the transfer to Firstmark is to move on from Wells Fargo.

Making the Process Easy and Finding a Better Loan

Borrowers can take control of the situation by refinancing their Wells Fargo Loans.

The traditional motivation behind refinancing is to get a lower interest rate on your student loans. In this case, borrowers may be able to get a lower interest rate and avoid potential Wells Fargo/Firstmark Services issues.

In a refinance, the new lender pays off the old debt, and the borrower repays the new lender according to a new loan contract. Borrowers need to take the time to apply with a new lender and to set up payment information with the new lender. However, the refinance company will be responsible for paying off existing loans.

By refinancing, borrowers can accomplish the following:

• Choose their next lender,
• Lower interest rates, and;
• Avoid headaches with the transition from Wells Fargo to Firstmark.

At present, the best refinance rates are available with the following lenders:

Rank	Lender	Lowest Rate	Sherpa Review
T-1		4.86%	ELFI Review
T-1		4.86%*	Splash Financial Review
3		5.29%	Laurel Road Review

The post Wells Fargo Exits Student Loan Business: What It Means for Borrowers appeared first on The Student Loan Sherpa.

Many lenders pay Firstmark to handle the day to day management of student loans, including answering borrower questions and collecting payments. For the over half a million consumers forced to work with Firstmark, getting help can be frustrating. This is especially true for borrowers looking for lower monthly payments or a better interest rate.

Even though Firstmark Services has earned a reputation for lousy customer service, there are several different ways that student loan borrowers can improve their circumstances. They may even be able to get rid of Firstmark entirely and work with another company.

What is Firstmark Services? And Why are they a Problem?

By digging into the Consumer Financial Protection Bureau Complaint Database, we see complaints about Firstmark’s failure to collect payments properly and complaints about Firstmark not working with borrowers on monthly payments.

Firstmark not lowering payments for borrowers isn’t a surprise because Firstmark is a loan servicer rather than a lender.

The lenders are the ones who set loan terms. A loan servicer, like Firstmark, is tasked with collecting payments and answering questions about the existing loan contract. In most cases, Firstmark does not have the authority to modify the terms of the original agreement.

Because Firstmark functions as something of a middleman between the borrower and the lender, reasonable requests may go unfulfilled. The servicer isn’t allowed to change the contract, and the lender doesn’t know about the customer’s request.

How to Go Around Firstmark to Get a Lower Interest Rate

The best and most efficient route for a lower interest rate with Firstmark Services is to refinance the student loan with another lender.

By refinancing, a new loan with new terms is created, and the old loan is eliminated. Through the refinance process, borrowers can get lenders competing to see who will offer the lowest interest rate, and borrowers won’t have to work with Firstmark going forward.

Borrowers that don’t want to work with Firstmark should avoid the following lenders who currently have contracts with Firstmark: CommonBond, Citizen’s Bank, U-Fi, Purefy, and Brazos.

Those looking for the lowest possible interest rate should investigate refinancing with the following lenders:

Rank	Lender	Lowest Rate	Sherpa Review
T-1		4.86%	ELFI Review
T-1		4.86%*	Splash Financial Review
3		5.29%	Laurel Road Review

Those looking for the lowest possible monthly payment may want to opt for a longer loan. Selecting a 20-year loan will result in a higher interest rate, but monthly payments will be far more manageable, and borrowers always have the option of paying extra or refinancing again.

The top rates in the 20-year loan category are with the following lenders:

Rank	Lender	Lowest Rate	Sherpa Review
1		6.08%*	Splash Financial Review
2		6.53%	ELFI Review
3		6.55%	Laurel Road Review

[Note: The lenders listed are pulled from our student loan refinance rates table, and the rates are updated monthly.]

Help for Borrowers who can’t Refinance

Refinancing away from Firstmark Services may be the easiest way to get a better interest rate or lower payment. However, refinancing isn’t always an option for borrowers who don’t have the credit score or income to qualify.

Sadly, the borrowers who need the help the most are the ones who will have the most difficult time getting help.

When the most effective option isn’t available, borrowers can resort to longshot strategies. These approaches may not always work, but they may be worth trying even with limited chances of success:

Call the Lender Directly – Because Firstmark usually doesn’t have the authority to change the loan terms, borrowers can reach out directly to the lender for help. The odds are pretty good that the lender will direct the borrower back to Firstmark. Borrowers should explain that they have already reached out to Firstmark and that Firstmark told them they couldn’t make changes to the loan. The success of this approach may vary from one lender to the next. Borrowers may also want to investigate if the lender has an Ombudsman or Consumer Advocate. These resources may be the best option when making this unique request.

File a CFBP Complaint – Reaching out to the CFPB is an excellent way to bring some extra attention to your situation. Student loan companies are often very responsive to complaints, and even if the borrower doesn’t get the help they are asking for, they may get a more detailed explanation of the issue. This site has previously explained how to file a CFPB complaint and why it can make a difference.

Don’t Buy the Hype on Deferments and Forbearances

Many student loan companies will try to convince borrowers looking for a lower interest or lower payment that a deferment or forbearance will help them.

Unfortunately, these remedies usually only delay the problem and make things more difficult in the long run.

Borrowers should understand that even though a deferment or a forbearance may pause payments, interest usually continues to accrue. This means that at the end of the “break,” the balance will have gone up, and payments may be higher. This option might help borrowers temporarily furloughed. For those with long term issues, it is best to explore other forms of assistance.

Final Thought: Understand how the system works to avoid wasting time.

Having a servicer like Firstmark puts some distance between the lender and the borrower.

Borrowers that understand this issue can do two things: either find a new lender or convince the current lender to change the terms of the deal.

The post Get a Lower Interest Rate on a Firstmark Services Student Loan appeared first on The Student Loan Sherpa.