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.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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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 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 firstname.lastname@example.org, 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.
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.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 6.23%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|