While newer federal loans originate with Uncle Sam, the government doesn’t hold on to your debt for the life of your student loans. The United States Department of Education can sell loans to loan servicers, which help facilitate payments.
One such organization is FedLoan Servicing, which is approved by the Department of Education to service federal student loans. If you have FedLoan student loans, here’s what you need to know.
What are FedLoan student loans?
FedLoan Servicing handles the administration of student loans for borrowers and is one of the few organizations approved to do so by the Department of Education. It was established by the Pennsylvania Higher Education Assistance Agency (PHEAA) with the specific intention of helping service federal loans.
It’s also one of the largest loan servicers in the U.S., and its student loan portfolio is a whopping $303 billion.
Repaying student loans through FedLoan
If your loan is sold to and serviced by FedLoan, the company will be your main contact for managing and repaying your debt. You’ll receive monthly statements and make payments to FedLoan. You can do so online via your account portal or by mail.
If you want to mail 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 and log in to 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.
Repaying your FedLoan student loans faster
Although FedLoan considers Standard Repayment “the fastest and most cost-effective repayment plan,” there are options to pay down your total balance faster. Here are some suggestions:
- Use direct debit: This service automatically deducts your monthly payment from your bank account, and you’ll qualify for an interest rate reduction of 0.25% if you use it. You should always check your payment to ensure it was processed, however. No electronic system is perfect, and if something prevents your automatic transfer from going through, you could be hit with a late fee or go into delinquency for a missed payment.
- Pay ahead: With this option, you pay more than you’re billed, which puts your account in “paid-ahead status” and results in a lower amount on your next bill. FedLoan suggests that you continue paying the original amount due monthly versus the reduced amount you’ll see on your statement while your account is in paid-ahead status.
- Pay interest while in school: If you can pay interest on unsubsidized loans while you’re in school or during the grace period, you’ll reduce the interest that capitalizes on the loan when repayment begins. You could not only save money on the total balance but also pay off the loan faster.
- Choose a new repayment plan: Sometimes the 10-year Standard Repayment Plan might not be the best choice for your financial situation. There are other plans you can talk to the servicer about, including Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR).
Tips for working with FedLoan Servicing
Do you struggle to make your FedLoan student loan payments on time and in full? 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.
FedLoan even details the various situations you might find yourself in, from a missed payment to a more major change such as a drastic reduction in income. Here’s how FedLoan can help:
- Changing your payment due date: FedLoan encourages you to choose a due date that works for you. It could be your payday or another date when you have the most money in your bank account each month.
- Choosing a new payment plan: If you need a different repayment plan, the servicer makes it easy to find one that works for you. You can go to its “Repayment Schedule Estimator” under “View Your Options” on the “Delinquency and Default” page. There, you’ll fill in your marital status, whether your income has changed, where you live, your expected income for the year, your dependents, the number of months you’ve been in repayment, and the amount and interest rate of your loan. It will then tell you which plans work best for your situation.
- Putting payments on hold through deferment or forbearance: If finding a new repayment plan doesn’t work for your situation, FedLoan will help you figure out deferment or forbearance options. For instance, deferment will allow you to pause student loan payments for up to three years under certain circumstances. Only unsubsidized loans will continue to accrue interest, which you can either pay each month or allow to capitalize (roll into your balance). If you go the forbearance route, you can pause payments for up to 12 months at a time, but all loan types will accrue interest. Contact the servicer to discuss your options.
FedLoans contact information
You can call and speak to a representative about FedLoan student loans Monday through Friday, 8 a.m. to 9 p.m. EST. The toll-free FedLoans phone number is (800) 699-2908.
If you need to submit paperwork, FedLoan Servicing’s main mailing address is FedLoan Servicing, P.O. Box 69184, Harrisburg, PA 17106.
For credit disputes, submit the proper forms to FedLoan Servicing Credit, P.O. Box 60610, Harrisburg, PA 17106.
If your loan is sold and 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 of how to navigate your account so you can properly manage your loans.
Jordi Lippe-McGraw contributed to this article.
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