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.”
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.
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.
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.
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.
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.
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?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. 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. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.57% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|