NC College Foundation Loans Set to Move

College loansPhoto byAndrew Neel on Unsplash

Recently the College Foundation of NC, CFNC or CFI, announced that some of the loans they hold will be relocating to another management firm. If you have FFELP loans with CFI they will soon be managed by Nelnet. FFELP loans are set to transfer to Nelnet on 03/25/23.

The announcement was made by letters sent out in February to borrowers.

The Nationwide Multistate Licensing System (NMLS) license number for Nelnet, CFI informed loan holders, is 1508613. It wasn't explained exactly what that number means to borrowers who are still paying on their FFELP loans.

The Division of Banks is part of the Nationwide Multi-State Licensing System & Registry (NMLS). NMLS is a collaborative effort among state regulators to bring greater efficiencies and accountability to the supervision of the financial services industries. — Mass.gov

Once your loans transfer over you will be given a new account number and begin making your payments to Nelnet.

At this time, it is unclear if this transfer of loan management will affect your eligibility for Biden's student loan forgiveness program which is currently being hard-fought at the Supreme Court level.

I spoke with several borrowers who have dealt with CFI and all agreed the loans have been "predatory" and that there is a general lack of transparency regarding how their loans were managed. Several borrowers I spoke with complained that their loans had more than doubled since they initially borrowed the college funds and that income-based repayment plans have been a two-edged sword. This "help" creates more and more debt, spiraling into what borrowers told me feels like a "hopeless situation." The borrowers I spoke with preferred to remain anonymous.

CFNC is not accredited with the Better Business Bureau, but there have been a number of complaints.

Author screenshot of BBB websitePhoto byOne Writer

It's unclear whether this transfer of loans away from the unpopular CFNC will help to renew borrowers' trust in how their loans are being handled, how their questions are handled, and how easily they can manage their loans. Nor is it clear why the loans are being transferred to Nelnet.

Sometimes we need to transfer a borrower's federally owned loan between members of our federal loan servicer team, which changes the servicing assignment for those loans. — says StudentAid.gov.

Now, let's clear up a few questions.

What Is Nelnet?

Nelnet, like CFNC, is a student loan servicing company. They oversee the management of federal loans.

What Is a FFELP Loan?

There are a variety of loans you may have acquired in college, like Perkins loans, subsidized and unsubsidized Stafford loans, and FFELP loans, which are through the Federal Family Education Loan Program (FFELP). Because some loans are generally managed by private companies or third parties like the CFNC or Nelnet, there's a lot of confusion as to whether these loans are considered government or private, which is critical for whether or not they qualify for forgiveness.

StudentAid is saying to keep checking and remain hopeful, while CFNC seems to be throwing its hands in the air with a "we don't know." Borrowers wait and wait for clarity on this, which may impact their distaste for working with CFNC.

What if You Have Non-FFELP Loans with CFI?

If you have non-FFELP loans, those loans will stay with CFI, again, remaining unclear as to whether they will qualify for relief under Biden's relief plan should it make it through the Supreme Court.

What You Need to Do

Borrowers need to set up a new account with Nelnet to be sure they do not miss any payments or send their payments to CFI by mistake. Register for your online account at www.nelnet.com after the transfer on 03/25/23 takes place. But also check in with your CFNC Dashboard during this transition to make sure you don't end up with loans with both companies.

Trust me. You do not want to get caught with your pants around your ankles on this. Late loan payments go on your credit and stay there. Even if you call CFI people they tell you there's nothing they can do. — anonymous CFNC loan holder.

Note: Late payments on CFNC loans do go on your credit and those derogatory marks remain there until that loan is paid completely off. It does NOT fall off your credit after 7 years if there is still a balance on your loan.

Nelnet contact info for payments due after 03/25/23:

Mailing address for payments: Nelnet, PO Box 2970, Omaha, NE 68103-2970

Phone: 888-486-4722

Nelnet address: Nelnet, PO Box 82561, Lincoln, NE 68501-2561

Website: www.nelnet.com

Unless you are notified otherwise, automatic drafts should automatically transfer over to Nelnet without interruption.

CFNC reports that in the meantime should you have any questions, you may still call them at 800-722-2838 or email for support at repayinfo@cfi.org.

Lastly, what should you do if you find yourself in over your head with college loans?

Experts from The College Investor agree that:

The hard part is navigating the complex world that is the student loan repayment system. — The College Investor

And offers some advice on staying on top of your loans before default and before those nasty red marks on your credit, including checking for state loan forgiveness that may be available:

Before you give up on not qualifying for Federal loan forgiveness programs, check your state and see if they offer any incentives or assistance: Student Loan Forgiveness by State. — The College Investor

Student Loan Debt Relief, which is currently blocked in the courts, may still come through for many Americans who are buried in college debt and just trying to navigate all the confusion and ballooning interest. For now, another confusion as loans are transferred to Nelnet.

Stay tuned to the CFNC website, Student Aid, and to Nelnet to make sure your loans are managed properly and paid when due.