MyFedLoan Review: Managing Your Student Loan Repayment

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After throwing your mortar board in the air at graduation, the last thing you want to think about is your student loan servicer. The company that takes hundreds of dollars from your bank account each month doesn’t exactly elicit warm, fuzzy feelings.

However, your federal loan servicer is seriously important. You’ll work with them for 10 years or more as you make payments on your loan. Plus, they’re who you go to with questions or to apply for alternative payment plans.

If you took out federal loans, you could end up with FedLoan Servicing as your servicer. If you manage your student loans through the company, here’s how to use its MyFedLoan online platform, take full advantage of the site’s features, and handle issues with the company.

MyFedLoan student loans

FedLoan Servicing is a nonprofit organization run by the Pennsylvania Higher Education Assistance Agency (PHEAA). PHEAA’s name can be misleading because FedLoan Servicing handles loans nationally.

Under the current structure, there are nine federal loan servicers. You don’t get to choose one from the list or switch servicers. Instead, the government appoints one to you when you take out student loans.

In 2012, the U.S. Department of Education (DOE) selected MyFedLoan to service federal student loans within the William D. Ford Direct Loan Program. That means that you might end up with FedLoan Servicing if you have one or more of the following student loans:

  • Direct Subsidized Loans: For undergraduate and graduate students with financial need
  • Direct Unsubsidized Loans: For undergraduate and graduate students, regardless of financial need
  • Direct PLUS Loans: For graduate students or parents of students
  • Direct Consolidation Loans: For those who consolidated their federal loans

Using the FedLoan Servicing platform to manage your loans

If FedLoan Servicing is your loan servicer, using the MyFedLoan online platform is the easiest way to make payments, track your loan repayment progress, get information about forgiveness options, and download the forms needed for the student loan interest tax deduction.

If you like to use your phone to handle your finances, FedLoan Servicing also offers an app for both Android and iOS phones.

To get started with either the full website or the app, you first need to create an account. To do so, click on “sign in” at the top right, then choose “Create account now.”

FedLoan Servicing

Image credit: FedLoan Servicing

The platform will prompt you to enter your name, email address, date of birth, and Social Security number or account number. Then, it will ask you to create a username and password and to set up identity verification questions.

Once you have an account and sign in, you can use the platform to view your loan balance, payment due dates, and interest rates.

Beyond information about your loans, the MyFedLoan portal also has other useful tools. The site has a section dedicated to student loan basics, such as an overview of your repayment options, what to do if you fall behind on your payments, and special programs for teachers or military service members.

MyFedLoan repayment options

You can make student loan payments in the following ways:

  • Direct debit: You can link a checking or savings account to your FedLoan Servicing account. The company will automatically withdraw your payment on the same day each month. As an added benefit, signing up for automatic payments can reduce your interest rate by 0.25 percent.
  • App: Use the app to send your payments or make extra payments on your loans.
  • Website: You can manually make one-time payments through the site.
  • Phone: FedLoan Servicing has an automated phone line you can call at any time to make payments. Dial 1-800-699-2908 and have your loan account number and bank account routing number ready.
  • Mail: If you prefer, you can mail a check or money order to the company. However, the FedLoan Servicing address for payments is different than the address you use for other tasks, such as submitting forms. Mail your payments to: U.S. Department of Education, FedLoan Servicing, P.O. Box 530210, Atlanta, GA 30353-0210.

If you’re struggling to afford your payments, FedLoan Servicing might be able to help you with the following repayment options:

1. Alternative FedLoan payment plans

If you can’t afford to pay the full amount due but can pay a portion of it, contact the company to apply for an income-driven repayment plan (IDR).

Under an IDR plan, the DOE caps your payments at a percentage of your discretionary income and extends your repayment term. Depending on your finances, your monthly payment could be much lower than it is today. You will pay more in interest over time, but an IDR plan can be helpful if you need relief right now.

FedLoan Servicing provides information on the IDR plans available. It even has a repayment calculator so you can get an estimate of your monthly payment under each plan. That way, you can make an educated decision.

2. Deferment

If you can’t afford to make any payment toward your loan, you might qualify for a loan deferment. With a deferment, you can postpone making payments for up to 36 months. If you have subsidized loans, the government will cover the accrued interest while the loan is in deferment.

Under the “Manage Repayment” section of your account, you can take a quiz to see if you fit the eligibility requirements before applying online for a deferment.

3. Forbearance

Forbearances are similar to deferments in that you can postpone payments. However, you can only pause payments for up to 12 months at a time with a forbearance. Unlike deferments, you are responsible for all interest that accrues, regardless of your loan type.

4. Student loan forgiveness

If you’re planning on pursuing Public Service Loan Forgiveness (PSLF), FedLoan Servicing is the only servicer that manages PSLF applications. In fact, if you have another servicer but are eligible for PSLF, the DOE will transfer your loans to FedLoan Servicing.

Through the online MyFedLoan platform, you can download and complete the Employer Certification Form (EFC). The EFC is a form you periodically submit as you work toward PSLF. The servicer reviews the form to ensure you’re eligible for PSLF.

5. Discharge

In some cases, you might be able to qualify for a discharge of your student loans. For example, if you’re permanently disabled and unable to work, you might be eligible for Total and Permanent Disability Discharge.

You can find out about all the possible discharge options and how to apply on the loan forgiveness and discharge section of the MyFedLoan portal.

MyFedLoan reviews

When it comes to federal loan servicers, one common complaint is that you can’t switch servicers if you’re unhappy with the one the DOE assigned to you. That issue is a real problem for some FedLoan Servicing customers.

The company is not accredited by the Better Business Bureau (BBB), but there are many reviews on the BBB site. Most of them are complaints — in fact, 97 percent of the BBB comments are negative. Many of the complaints are about how payments are processed and allege that PSLF applications are delayed or ignored.

MyFedLoan.jpg

The complaints are so numerous that FedLoan Servicing is now facing a lawsuit. According to The New York Times, the attorney general of Massachusetts filed a lawsuit against FedLoan Servicing’s parent company, PHEAA. The suit accuses the company of making errors while managing PSLF and raising borrowers’ repayment costs.

In a statement to The New York Times, a PHEAA representative said that the company does not agree with the allegations.

The lawsuit is ongoing, and it might be years before there is a resolution. In the meantime, you can contact the Consumer Financial Protection Bureau to lodge a complaint if you experience problems.

What to do if you want a new servicer

Although you can’t switch federal loan servicers, there is another way to change servicers if you’re unhappy with the one you’ve been assigned.

To get a new servicer, you can refinance your student loans with a private company. Through refinancing, you take out a new loan from a bank or financial institution and use it to pay off your current student loans.

The new loan is managed by a separate company and might have a different repayment term, interest rate, and minimum payment. You could use refinancing to save money over time or to reduce your monthly payment.

However, it’s important to know that you will lose out on federal loan benefits if you refinance. You will no longer be eligible for federal perks like IDR plans or forgiveness programs. That’s why it’s important to weigh the benefits and risks of refinancing before applying.

Tackling your student loan debt

Managing your loans can be overwhelming, but understanding who your loan servicer is and what repayment options are available can help you through the process. The MyFedLoan platform has resources and information available that can empower you to handle your loans more effectively.

By being aware of some of the issues facing the company, you can monitor your account and take action if needed.

Interested in refinancing student loans?

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1 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student Loan RefinanceFixed rates from 3.999% APR to 7.804% APR (with AutoPay). Variable rates from 2.480% APR to 7.524% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.480% APR assumes current 1 month LIBOR rate of 2.07% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

3 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.72%-8.17% (2.72%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.50%-8.69% (3.50% – 8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Average savings based on 18,113 actual customers who refinanced their federal and private student loans through our Education Refinance Loan between January 1, 2017 and December 31, 2017. The calculation is derived by averaging the monthly savings of Education Refinance Loan customers whose payments decreased after refinancing, which is calculated by taking the monthly student loan payments prior to refinancing minus the monthly student loan payments after refinancing. The borrower’s savings might vary based on the interest rates, balances and remaining repayment term of the loans they are seeking to refinance. The borrower’s overall repayment amount may be higher than the loans they are refinancing even if their monthly payments are lower.
2.57% – 5.87%Undergrad
& Graduate
Visit Earnest
2.80% – 6.38%1Undergrad
& Graduate
Visit Laurel Road
2.48% – 7.52%2Undergrad
& Graduate
Visit SoFi
2.47% – 7.99%Undergrad
& Graduate
Visit Lendkey
2.57% – 6.65%3Undergrad
& Graduate
Visit CommonBond
2.72% – 8.17%4Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.