April 28, 2018

ACS Education: What You Need to Know

Is ACS your federal loan servicer? Read on for what you need to know. Learn how to avoid common problems.

What Is ACS?

ACS is a federal student loan servicer owned by Xerox (yes, really). They help the Federal Government manage your student loans. They act as the middleman between you and the lender.

ACS is now known as Conduent Education Services. This name change happened in January 2017. There should be no change in how you access ACS. You can still log in with your ACS log-in information.

ACS' services are free. A few things they can help with include:

  • Keeping track of your balances and assisting with billing
  • Switching repayment plans if you can't afford payments
  • Understanding your bills
  • Customer service
  • Loan consolidation
  • Applying for forgiveness programs

Complaints About ACS

ACS once managed the largest amount of student loans. However, because of the large number of complaints against them, the Department of Education transferred all direct loans to other servicers. But ACS still services federally-backed bank loans, like those from Chase and Wells Fargo.

Recently, ACS came under fire for failing to properly support borrowers during repayment. They recently needed to settle a $2.4 million lawsuit in Massachusetts.

Unfortunately, you don't get to pick your servicer. It's assigned by the DOE, so you have no say. If you have ACS as your servicer, we're here to help you understand your options with them.

Read on to learn more about ACS and the issues borrowers have had. If you've been wronged, there are some places to seek further help.

Common Problems

  • Failing to Provide Repayment Options: This was the leading reason that the state of Massachusetts filed a lawsuit against ACS. The loan company did not provide enough options for borrowers struggling with their loans. Borrowers asked to be on income-based repayment plans, but ACS either rejected their application, failed to enroll them, or delayed processing. This resulted in many borrowers stuck with payments they couldn't afford or entering default.

    What You Can Do: If you are struggling, know there are options. No matter your financial situation, there is an option. Contact your servicer and explain that you need help. If they say "no" to another repayment plan, contact the DOE. If you still are not receiving help, contact the Ombudsman Group.

  • Failure to Process Payment Plans: Another problem is not processing payment plans in a timely manner. There is often a delay with all servicers when applying for an income-driven repayment plan (IDR). They need extra tax documentation and review.

    What You Can Do: As soon as you're eligible for a repayment plan, fill out the necessary forms. Mail or scan in documents. Maintain contact with your servicer until the plan has been applied. It may take anywhere from two weeks to a month for a plan to apply to your account. Make sure that you are making payments. If you are past due or going to become past due, ask for a forbearance.

  • Transferred Loans: Your student loans may not be transferred to another servicer at any time (the DOE makes this call). You'll be informed of any changes. Because ACS mishandled loans, most loans were transferred to other companies. This can cause some issues for the borrowers.

    A borrower may call to make a payment and be told their account is past due. Or that their loans would not qualify for certain forgiveness programs. Whatever the issue, your servicer is supposed to help you. Especially during a transition.

    What You Can Do: After a transfer, contact the new servicer immediately. You can then figure out auto-debit. Talk with them to schedule payments and figure out your best payment options.

    Not receiving information needed from your servicer? Contact the Department of Education. You can reach the DOE at 1-800-872-5327. A third-party dispute group, the Ombudsman Group, can help if all else fails. You should never feel neglected by your servicer. Make sure your concerns are heard.

When Should You Contact ACS?

You should contact ACS if you have any issues about your accounts. Their job is to help you. They are supposed to prevent you from defaulting on your loans.

Here are some situations when you should definitely contact them:

  • You see bill issues
  • Your contact information changes
  • You can't afford your payments
  • You need to change your payment due dates
  • You received a bill while still in school
  • You have not received a bill

To contact ACS, dial 1-800-835-4611 or visit their website.

Tip: Default will happen if your account is past due for 270 days. If you make no payments for 360 days, loans will go to a collections agency.


ACS has had a lot of unhappy borrowers in recent years. If you feel like you are not receiving help or have been wronged by them, here are some steps you can take:

  • Department of Education: If ACS is not providing you with an appropriate answer, you should call the DOE. The DOE will help with problems that servicers cannot or will not handle. You can speak with them at 1-800-872-5327.

  • Ombudsman Group: If the DOE is still not helping you through a dispute with your servicer, there are other options. The Ombudsman Group is a neutral third-party to help through disputes. This is your last resort. You can reach them at 1-877-577-2575.

  • File a Complaint: You can file a complaint with the Consumer Financial Protection Bureau.

Repayment Help from ACS

Every student loan borrower begins repayment with the Standard Repayment Plan. This plan evenly divides payments over 10 years. This is the quickest way to repay with the least amount of interest.

If you are unable to afford the Standard Repayment Plan, ACS offers several other options.

  • Graduated Repayment Plan: This is still a 10-year plan, but the payments start out low and get bigger. Your payments will increase by 20% every two years. Your final 2 years of payments will not be more than 3 times your original payment.

    This is a great plan if you know your income will increase every couple of years. If you find payments are becoming unmanageable, you can return to the Standard plan. You may also change to an income-driven repayment plan if needed.

  • Income-Driven Repayment Plans: These plans are based on your current income. With an income-driven repayment plan, some borrowers may qualify for a $0 per month payment. Under these plans, your loans will be divided over a 20-year term.

    The federal government offers borrowers four different repayment plans: Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), Pay as You Earn (PAYE), and Revised Pay as You Earn (REPAYE). Each option provides different benefits. Your payment amount depends on your income and family size. Your servicer can determine which option is best for your current financial situation.

    If you have a spouse with federal student loans, be sure to let your servicer know. Every year you will have to update your eligibility. Be sure to get your forms in on time. If you don't return your forms on time, your payments will return to the Standard Repayment Plan.

  • Deferments and Forbearances: If you're really struggling, you can ask for a pause on payments. Both options work a little differently.

    Deferments may be used for up to 6 months per application, for a total of 3 years. The most common uses are unemployment, economic hardship, in school, or in the military. You must send in a form and be qualified. A deferment can be denied if there is not enough support. During a deferment, the federal government covers the interest on your subsidized loans.

    Forbearances are useful if you need to postpone payments right away, or if you don't qualify for a deferment. You can request a forbearance for up to a year, up to a cumulative maximum of 3 years. Common uses for a forbearance are financial hardship, unemployment, and excessive medical expenses. During forbearance, the interest on your loans will continue to accrue.

    Most times, if you call your servicer, they can grant a forbearance over the phone. This can be used to bring (or keep) your account current.

    Married Borrowers:
    If you are married, you will need to share that with your servicer. Need a payment plan? Your servicer will need your spouse's financial information. Signing up online is the easiest way to enter your spouse's information. You will be able to pull the information directly from the IRS website.

    Unable to access your spouse's financial information? Let your servicer know. There may be other options to start a repayment plan.

Alternatives to ACS

If you are no longer satisfied with ACS and want to leave, there are a couple of options. Remember to do your due diligence when deciding on a different option.

  • Consolidation: Consolidation is a great option if you only have federal loans. Consolidation will take all your loans and make them one new loan. So you'll only have one payment per month. This is great if you have many loan servicers and different payment due dates every month.

    If you consolidate your loans, you can pick the servicer you want. You can choose from Navient, Nelnet, or FedLoan. Consolidation is free. When you sign up, you will need to enter a repayment plan. The easiest way is to complete both applications is on their website.

  • Refinance: If you have a mix of federal and private loans, refinancing may be the best option. Refinancing is through a private lender. They will combine both loans and give you an interest rate based on your creditworthiness. This will create one monthly payment.

    If your credit has improved since graduation, consider refinancing. You can get a better interest rate. This could result in thousands of dollars in interest savings over the years. See our favorite student loan refinance providers.

Bottom Line

The best thing is to remain in contact with your servicer. They are there to help. If you ever feel like you're struggling, contact them. Know your options. Know what not only will get you out of debt the fastest, but also what will be a manageable payment.

The best thing you can do is to keep records of your payments. Track your loans from the date of first disbursement. Be aware of any fees and questionable charges. If you feel like you've been wronged by ACS, there are other options too.

Keep yourself educated. Read through our other articles about student loans. Gain confidence when talking with your loan servicer.

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