FedLoan Review: How to Work With This Student Loan Servicer

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While federal student loans are guaranteed by the government, it’s not Uncle Sam that services this debt.

The U.S. Department of Education instead assigns your loans to student loan servicers that manage them during repayment. One such servicer approved by the Department of Education is FedLoan Servicing.

You won’t get to choose the servicer with which you work, and, like many servicers, some customers complain that FedLoan is plagued by recurring issues that can cause big problems for borrowers. Still, making sure you understand the terms and options offered by your servicer can go a long way in minimizing such conflicts.

It could be the difference between a positive experience with FedLoan — or a student loan disaster. If you have FedLoan student loans, here’s what you need to know.

FedLoan Servicing review: The basics

If you’re working out the details of your student loans, you might not know if you have FedLoan student loans. In fact, many borrowers even wonder whether FedLoan is a scam since they often can’t remember working with or signing up with the servicer.

The good news is that FedLoan is not a scam. FedLoan Servicing handles the administration of student loans for borrowers, and is one of a few organizations approved to do so by the Department of Education. It was established by the Pennsylvania Higher Education Assistance Agency (PHEAA) to help service federal loans.

FedLoan is not the most popular servicer. In fact, it is one of three companies against which borrowers file the most complaints with the Consumer Financial Protection Bureau (CFPB). The potential for a negative experience with FedLoan Servicing underlines the importance of understanding this company, how it works and what your options are.

Do you have FedLoan student loans?

Your loans might have been sold or transferred to FedLoan from a different servicer, or FedLoan might be your original servicer. If so, this company will be your main contact for managing and repaying your debt.

Fortunately, you don’t have to guess whether FedLoan Servicing has your account. If you’re not sure which company is your student loan servicer, or think you might have multiple student loan servicers, you can use the National Student Loan Data System to look up your federal student loans and view their statuses and servicers.

Repaying your FedLoan student loans

You can receive monthly statements and make payments to FedLoan through its online portal at myfedloan.org or by mail. You can also review past payments, see your interest rate details, request a payoff amount and more.

If you want to mail in your payments, send checks made payable to FedLoan Servicing to the following address:

Department of Education, FedLoan Servicing
P.O. Box 530210
Atlanta, GA 30353

To make payments electronically, you’ll need to set up an account at FedLoan Servicing. Once your account is established, you can connect your checking account to its system and either make one-time payments or sign up for direct debit.

What we like about FedLoan Servicing

Like with many other federal student loan servicers, keeping your student loans with FedLoan means you can maintain access to a wide range of federal protections for borrowers. Additionally, FedLoan is the servicer you’ll use if you’re pursuing Public Service Loan Forgiveness (PSLF).

Here are some key terms and features you should be aware of if your loans are held by FedLoan Servicing (though many of these apply to federal loan servicers in general):

  • You can manage, track and make payments on FedLoan student loans online or by mail.
  • FedLoan honors and maintains all federal student loan benefits, including subsidizing the interest on Direct Subsidized Loans when applicable.
  • As mentioned above, FedLoan is the official servicer for PSLF, allowing you to make and track PSLF-qualifying payments.
  • You can choose from and enroll in any federal repayment plan, from the standard 10-year term to income-driven repayment (IDR).
  • You can change your payment due date as well. FedLoan allows you to choose your own timing to make payments by selecting a due date that works with your finances.
  • FedLoan honors in-school and grace-period deferments, and it offers deferment and forbearance for qualifying borrowers in repayment.
  • Your fixed student loan rates were set at the time of your federal student loan disbursement and won’t change. But FedLoan does offer a 0.25% rate discount for borrowers who enroll in autopay.

FedLoan will work with borrowers to explore their options and make changes to their repayments. The servicer is required to help you set up and process these changes, such as deferring student loans, enrolling in a new payment plan or making extra payments.

What to keep in mind about FedLoan Servicing

Just because FedLoan is required to assist you doesn’t mean it always will get it right. The company handles a large volume of student loans and has been criticized for mishandling some aspects of the repayment process.

For example, FedLoan was sued by the Massachusetts government in 2017 for allegedly mishandling payments for borrowers using IDR plans or working toward PSLF, according to the official complaint.

A spokesperson for PHEAA, FedLoan’s parent company, disagreed with the allegations in a statement to The New York Times, adding that it “remains committed to appropriately resolving any outstanding borrower issues.”

Tips for working with FedLoan Servicing

These issues highlight how important it is for FedLoan borrowers to watch their student loan accounts to ensure payments are made and processed without a hitch.

Doing your part to track and manage your student debt will help you catch issues early on and prevent more serious problems such as delinquency or even student loan default.

Here are some best practices that FedLoan student loan borrowers should follow:

  • Review your student loan account monthly. You should always check your payment to ensure it was processed and applied correctly.
  • Communicate with FedLoan Servicing. If you have questions, concerns or issues, don’t hesitate to communicate with FedLoan. You can call and speak to a representative about FedLoan student loans from 8 a.m. to 9 p.m. ET Monday through Friday. The toll-free FedLoans phone number is 800-699-2908.
  • Check up on major changes to student loans. If you’re submitting applications for a new repayment plan, PSLF, deferment or forbearance, contact FedLoan to make sure it receives and correctly processes such documents. Continue to make your regular payments until the change is approved and takes effect.
  • Make sure extra payments are applied correctly. FedLoan automatically spreads out payments across your loans based on the outstanding balance. If you want to pay down a specific loan instead, you’ll need to indicate that by using FedLoan’s targeted payment feature. You’ll also need to ensure that extra payments are applied to your principal, rather than counted as advance payments, which can include interest.
  • Reach out if you’re struggling with student loans. The servicer can help and is willing to work with you in a variety of ways. It has an entire section on its website dedicated to helping you if you’re having trouble paying.
  • Know how to get help when working with FedLoan. Borrowers experiencing issues with their student loan servicers should know that assistance is also available through options such as filing a complaint with the CFPB or enlisting the help of a student loan ombudsman.
  • Consider refinancing or consolidating your FedLoan student loan. If you do not want to keep working with FedLoan, you might consider seeking a consolidation loan or refinancing with a private lender. Refinancing, in particular, can give you more control over the lender and servicer with which you work, as well as the repayment terms and costs of your student loans, though make sure you look at both the pros and cons of such a move.

Bottom line: Stay on top of your FedLoan student loans

If your loan is serviced by FedLoan, make sure you understand how the system works and what your responsibilities are.

Don’t hesitate to reach out to FedLoan if you find yourself struggling to make payments or are unsure about how to navigate your account so that you can properly manage your loans.

If you’ve reached a dead end with FedLoan, escalate the issue to the CFPB or an ombudsman. You might even be better off refinancing student loans to switch to a different lender.

While some borrowers encounter issues repaying FedLoan student loans, many others work with this servicer to manage their student debt without a hitch. The key is to do your part to monitor your payments and make sure everything’s on track.

Kali Hawlk and Jordi Lippe-McGraw contributed to this article.

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
LenderVariable APREligible Degrees 
Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

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 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.23% 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 hello@earnest.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

Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.

Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.

Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.

Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.

3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance:Fixed rates from 3.899% APR to 7.804% APR (with AutoPay). Variable rates from 2.470% APR to 6.990% 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 2.470% APR assumes the current index rate derived from the 1-month LIBOR of 2.08% plus 0.64% 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)

4 Important Disclosures for LendKey.

LendKey Disclosures

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.

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.

6 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 October 1, 2018, the one-month LIBOR rate is 2.22%. Variable interest rates range from 2.72%-8.32% (2.72%-8.32% 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 3.75%-8.69% (3.75%-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. Applicants with an Associate’s degree or with no degree must have made at least 12 qualifying payments after leaving school. Qualifying payments are the most recent on time and consecutive payments of principal and interest on the loans being refinanced. 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 cosigner who is a U.S. citizen or permanent resident. The cosigner (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 cosigner 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. Estimated average savings amount is based on 14,659 Education Refinance Loan customers who saved on loans between August 1, 2017 and July 31, 2018. The calculation is derived by averaging monthly savings across Education Refinance Loan customers whose payment amounts decreased after refinancing, calculated by taking the monthly payment prior to refinancing minus the monthly payment after refinancing. We excluded monthly savings from customers that exceeded $4,375 and were lower than $20 to minimize risk of data error skewing the savings amounts. Savings will vary based on interest rates, balances and remaining repayment term of loans to be refinanced. Borrower’s overall repayment amount may be higher than the loans they are refinancing even if monthly payments are lower.

2.47% – 6.99%3Undergrad
& Graduate
Visit SoFi
2.47% – 6.23%1Undergrad
& Graduate
Visit Earnest
2.47% – 8.03%4Undergrad
& Graduate
Visit Lendkey
2.95% – 6.37%2Undergrad
& Graduate
Visit Laurel Road
2.48% – 6.25%5Undergrad
& Graduate
Visit CommonBond
2.72% – 8.32%6Undergrad
& 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.