Who Actually Owns Student Loan Debt?

Student loans are owned by the federal government or private institutions, depending on the type of student loan. Federal student loans are owned by the U.S. Department of Education while private student loans are owned by the financial institution that granted them. Learn more how who owns student loans and how to find out who owns your student loan.

Ownership of Student Loans

Generally either the federal government or a financial institutions own a student loan.

A student loan may be originated by one institution but owned by another institution, and then guaranteed by yet another. It can also be serviced by other agencies. A loan servicer, which can change often, typically manages the billing process and accepts payments, and serve as the point of contact for the borrower for questions and concerns.

So, because the owner of your loan may be different from your main contact with the loan, determining who owns your student loan can be difficult. It may be even more difficult if you refinance your loan.

The owner of your student loan will depend on the type of loan you took out, although the federal government will likely play some role in your loan, such as backing the loan. Federal student loans can include Direct Loans, Perkins Loans, and Federal Family Education Loans. But keep in mind that federal loans can be held by private companies.

Most lenders that originate student loans are large institutions, such as large banks or the federal government. After a loan is originated, however, it becomes an asset that can be bought and sold on the market. Banks often sell student loans to another intermediary, which improves their capital ratio and allows them to make more loans.

Non-Government Owners

Most student loans that are not owned by the government are held by the lender or a third-party loan servicing company. Originators and third parties can each perform in-house collection services or contract that duty out to a collection agency. Some of the largest private student loan companies include SoFi Technologies, Discover Financial Services, and Navient.

Many student loans are also owned by agencies such as Sallie Mae or private companies like NelNet Inc. that have relationships with the Department of Education.

The Federal Government as Creditor

Student loans debt is increasingly significantly, with total U.S. student loan debt reaching more than $1.7 trillion in the fourth quarter of 2022, according to Federal Reserve data. A majority of that debt is owned by the federal government.

Prior to the Affordable Care Act, a majority of student loans originated with a private lender but were guaranteed by the government, meaning taxpayers would foot the bill if student borrowers defaulted. In 2010, the Congressional Budget Office (CBO) estimated only 55% of loans fell into this category, compared to about 93% today.

At one time, the federal government did not own any student loans, although it has been guaranteeing loans since at least 1965. Student loans accounted for nearly 20% of all U.S. government assets in 2020.

How to Determine Who Owns Your Student Loan

You can take several steps to determine who owns your student loan. First you can check your credit report from one of the three major credit bureaus: Experian, Equifax, and TransUnion. The credit report may list your service provider for your student loan.

You can also contact your school or college's financial aid department for information on who owns your student loan. Finally, you can also check the U.S. Department of Education's Federal Student Aid site.

Once you find out who owns your loan, you can ensure your contact information is up-to-date and learn about any relief programs you may qualify for. You can take advantage of potential benefits like income-driven repayment plans.

The Bottom Line

Knowing who owns and services your student loan can be important to ensuring your loan remains current and that you understand the benefits and relief programs available to you. To find out who owns your student loan, you can start by checking with your school's financial aid office and the U.S. Department of Education's Federal Student Aid site.