Pennsylvania Higher Education Assistance Agency PHEAA, runs the non-profit organization called Fed Loan Servicing. This organization handles Federal student loans nationally.
There are nine federal loan servicers that are appointed by the government to service the student loans and handle the loan payments. FedLoans is one of them.
In the year 2009, FedLoan was appointed to service Federal student loans offered by the U.S. Department of Education (DOE) within the William. D. Ford Direct Loan Program.
You might get FedLoan as your servicer if you have opted for the following student loans -
Direct PLUS Loans
Direct Consolidation Loans
Direct Unsubsidized Loans
Direct Subsidized Loans
It should be noted that an employment certificate is required to get FedLoan Servicing.
- Loans serviced by FedLoan
- Services provided
- Still in school?
- Done with school?
- Payment methods
- Contact FedLoan Servicing
The two main types of Federal Loans serviced by FedLoan are -
Federal Family Education Loan Program (FFELP) Loans - As stated on their official website these kinds of loans were sold and transferred as a result of legislation known as the Ensuring Continued Access to Student Loans Act (ECASLA).
Under ECASLA, the U.S. Department of Education offered to purchase FFELP Loans from third-party lenders, primarily from the 2008-2009 and 2009-2010 academic years. FedLoan is one of the limited servicing agencies that is used by the US Department of Education to service these kinds of loans.
William D Ford Federal Direct Loan Program (Direct) Loans - These loans are not given through any third party lenders, rather they are provided directly by the US Department of Education. FedLoan is one of the few service providers employed by the US department of education to service these loans. These include Direct Subsidized, Unsubsidized and PLUS Loans.
Services provided by FedLoan
There are several facilities provided by FedLoan to a student loan borrower to ease the process of loan repayment. The various repayment, consolidation, forgiveness, and deferment plans are mentioned below.
Based on the budget the borrower can take help of the various repayment plans offered by FedLoan. The eligibilities may vary according to the type of loan, here is an overview of all the repayment plans available and key features to look out for each -
Standard Repayment - It can be the best option for you if you want to get rid of your loans as quickly as possible and are comfortable with the monthly payments required. This the quickest pay off plan available. The monthly payments to be made in this plan are fixed.
Graduated Repayment - This is the perfect plan to go for if you are comfortable in making larger monthly payments in the future. Monthly payments are less in the beginning but it will increase over time. It is a quick payoff option and in this plan, the initial monthly payments satisfy the interest-only.
Extended Fixed Repayment - This plan is ideal for you if you have a lot of debt on your hands and none of the other plans are suitable for you. Monthly payments are lower than that of the standard repayment plan and the repayment period is extended.
Extended Graduated Repayment - This repayment plan works best if you have a lot of debt and your current situation isn’t suited for the other repayment plans available. Monthly payments are initially low and will increase over time. The repayment period can be extended.
Income-Sensitive Repayment - if you require temporary relief from to fit in your budget and worried about your monthly payments then this plan is perfect for you.
Monthly payments are low and the repayment period can be extended. To be eligible, the loans have to be disbursed by FFEL. You must reapply annually for this plan as the information used to calculate the amount to be paid changes.
Income-Driven Repayment Plans - These plans need to be submitted at studentloan.gov, these plans are based on your state of residence, income and family size. Since the factors mentioned are subjected to change you will have to update it annually.
Here is an overview of the lifecycle -
Go to studentloans.gov and submit your request for application
Get approved for the IDR plan
Recertify when you receive a notification from FedLoan (you will be notified every 12 months)
Log in to studentloans.gov to complete the recertification
Receive loan forgiveness or pay off the remaining balance.
IDR includes many plans such as IBR, ICR, PAYE, and REPAYE.
Consolidation allows you to combine multiple federal loans into a single loan. Consolidation has its upsides as well as its downsides, and it depends from person to person and the current financial condition to see whether it is the right choice for you.
As mentioned you can combine only your federal loans, but what if you have private loans as well?
The solution to that is you can include those loans into the debt not to be consolidated, although adding this would result in an increase in the repayment term on your direct consolidation loan, as the total amount consolidated is more than the total amount of loans not to be consolidated.
Another important factor one should be aware of when consolidation is when it comes to PLUS loans, as a student you cannot consolidate your own federal loans with a PLUS loan in your parent's name.
As a parent, you can consolidate a PLUS Loan with a federal loan you took for your own schooling, you cannot consolidate a PLUS Loan with a federal loan obtained by a student in his/her name.
Much easier to manage payments with one bill and one servicer
You get an option to choose your servicer
If you have the fear of your interest rate going up you can switch from a variable-rate to a fixed-rate plan
If you are looking for a repayment plan, consolidation of your loans can help you get eligible for PAYE, REPAYE, PSLF and ICR repayment plans.
There are chances of you ending up with a longer repayment term
If your interest gets capitalized then you
You could potentially lose eligibility for loan incentive program benefits
You could lose your eligibility for PSLF payments
You could lose your eligibility for IDR payments.
3) Postpone Payments
There may be a number of reasons why you would have to postpone a payment. FedLoan takes this into consideration and in fact, the IDR plan allows borrowers to pay $0 a month till they are financially capable to make payments.
If IDR isn’t an option for you, then you can temporarily suspend your payments by using the following options - (It should be noted that the interest will accrue during this time of suspension)
Forbearance and Deferment
Both forbearance and deferment are somewhere similar as they can help you to postpone your payments. Under forbearance, you can pause your payments for up to 12 months at a time and you are responsible for interest accrued whatsoever loan type you have.
Another option is loan deferment through which you can postpone your payments for up to 36 months. If your loan is subsidized then the government will take care of your accrued interest.
You can check your eligibility under the Manage Repayment Section of your account (FedLoan account) by taking a quiz online.
Worried about your college tuition? Learn more about student loans
4) Loan Forgiveness and Discharge
Based on your situation from a professional standpoint you may be eligible to cancel or forgive your loans. After 120 qualifying payments, you could qualify for forgiveness on your direct loans.
Here is an overview of some of the forgiveness programs -
Public Service Loan Forgiveness (PSLF) - If you are working full time with a qualifying public service organization or serving as a full-time AmeriCorps or Peace Corps volunteer, you could potentially qualify for forgiveness after making 120 qualifying payments.
Teacher Loan Forgiveness - You can qualify for up to $17,500 on your FFEL program loans or Direct Loans if you teach full-time for 5 consecutive academic years in a low-income, secondary school or educational service agency.
Total and Permanent Disability Loan Discharge - If you have a medically definable physical or mental impairment or are a veteran who has a service-connected condition you could potentially qualify for a discharge based on a total and permanent disability.
Apart from the programs mentioned above, there are other options available, although they are much less common. Here is how you can qualify for them.
Other Loan Discharge Programs
School closure - You can qualify for this if the school you were attending had closed down and you were unable to finish your program in another school through a reach-out program.
False Certification of ability to benefit - You can qualify for this program is the school you attended had falsely certified your ability to benefit from the education.
False Certification (Disqualifying Status) - You can qualify for this if you had a physical condition, medical condition, legal status or legal condition that would legally bar employment in your field of study at the time your school-issued your loan.
False certification as a result of identity theft - You can be eligible for this program if the loan was falsely certified.
Unauthorized signature/payment - If the school took your signature on the loan application/promissory note without you being aware of the transaction or endorsed your loan check and did not give you the loan proceeds, then you can be eligible for this.
Unpaid refund - You can qualify for this program if your school did not pay a tuition refund which was required under federal law. You can be eligible regardless of whether the school is open or closed.
Spouses or parents of 9/11/01 victims - If you are a spouse of a public servant or spouse/child of a victim who died or was permanently disabled due to the terrorist attacks on September 11, 2001, then you can be eligible for loan discharge.
5) Missed payments
When you miss on a payment you fall under delinquency and if you miss a number of payments then you default on your loans. This has an adverse effect on your credit rating.
FedLoan will report the status of your loans to the consumer reporting agencies on a monthly basis.
Still in school?
You don’t have to make payments while you are still in school but FedLoan provides you with the tools to stay informed from loan balances to interest accrued.
You can get instant access to the loan details through your account access. FedLoan can help verify enrollment if the student has received a bill while still in school.
Tools to help you target which loan you want to pay down first.
Done with school?
When you enter the grace period FedLoan helps you with what to look out for during those 6 months.
You can always review your loan information through the account access which is an online tool provided by FedLoan.
You can estimate your monthly bill and create a plan on how to go about your repayment.
Once you know how much you should be paying each month you can start lowering your payments by exploring various repayment options, there are options where such as IDR where you can make a payment as low as $0 per month. Explore the various payment options available as discussed earlier in this article.
FedLoan Payment Methods
Student loan payments can be made through FedLoan in the ways given below -
1 - Direct Debit
You can link your existing account to your FedLoan Servicing account. It will credit your money automatically on the same day for each month. By doing this, you get a benefit of 0.25% on your interest rate.
2 - Website
You can make a one-time payment through the website manually.
3 - App
You can download MyFedLoan App and you can pay your dues or make any extra payment through it.
4 - Phone
It provides an automized phone line that is available all the time. Call on 1-800-699-2908, give your account number and bank account to make your payments.
5 - Mail
You can send your payments to -
U.S. Department of Education
P.O. Box 530210
Atlanta, GA 30353-0210.
You can do this by sending a check or money order to the company. If you can't afford your current loan payments then FedLoan provides some options for repayment.
6 - Pay by Third-Party Bill Pay Services
If you are keen on getting on board with a third-party service such as a bank it should be noted that they should have the right the address so that your payment is sent to the right place.
FedLoan does not provide any interest reduction or any form of incentives when you employ a third party to generate automatic payments. But a 0.25% reduction is provided when you enroll with the automated payment service provider of FedLoan Direct Debit.
If the payments are sent by email then they will be effective from the day we receive it, or in the case of a holiday, it will be effective on the next working day.
During the submission of payment, no ‘additional’ or extra information will be entertained by FedLoan. If any queries do come up it will be advisable to contact them directly.
FedLoan Servicing Reviews
In the last three years, the Better Business Bureau has received 271 complaints about MyFedLoan Servicing. So BBB finally declared MyFedLoan Servicing as a non- accredited company. In the past 12 months, they have received 118 complaints.
Public reviewers have criticized the company’s customer service as impolite and unhelpful. Others have reported that their website doesn't have the appropriate information.
There are many people who claim that they had no issue what so ever with MyFedLoan servicing.
You need to provide your employment certification form to get an early confirmation for PSLF. We advise you to check with your new ECF annually. There are 8 million qualified borrowers for Public Service Loan Forgiveness but FedLoan servicing had accepted 874,379 borrowers.
Loan forgiveness is awarded to government workers and employees who have made 120 monthly payments in the income-driven repayment plan. However, many borrowers got disappointed when they came to know that they are not eligible for IDR plan or they have opted for the wrong repayment plan.
About 30,000 students receive TEACH grants every year but most of them end up having their grants converted into loans because they haven't certified that they are completing their public service requirements.
There was a lawsuit filed against FedLoan Servicing by Massachusetts Attorney General Maura Healey in August 2017. He put allegation on the company that they prevented student borrowers from making a qualifying monthly payment which they count towards loan forgiveness, changing the consequences of its loan servicing failures on students.
Drawbacks of FedLoan Servicing
When you have a Federal Loan, then probably you might end up with FedLoan Servicing automatically. You can't pick your own apple from the basket.
In 2018, there was a survey on the company from many students loan planner readers. Half of the people gave 2.8 out of 5 stars to FedLoan.
There are many complaints against the company but let us see the most common complaints borrowers have spoken about.
Bad Customer Service
Generally, borrowers have mentioned that MyFedLoan has unhelpful, incompetent and inconsistent customer service.
It usually takes months to process simple requests which can be handled in 10-15 minutes. Borrower kept on getting different answers from different customer service representatives.
Sometimes they take years to fix one mistake occurred by them and create a problem for borrowers to file their audits.
Hurdles for Public Service Loan Forgiveness
FedLoan Servicing doesn't count the number of payments properly. To qualify for forgiveness, you need to have 120 payments done but they somehow come up with a less number.
Some students had to refinance their loan instead of loan forgiveness because the company didn't count the payment accurately.
Usually, under PSLF borrowers don't get good information as they don't have trained or informed customer service people to guide them.
2017 was a bad year for MyFedLoan Servicing as they were sued by the Massachusetts attorney general Maura Healey. The complaint was made to the servicer of causing public servants to lose benefits and assistance through PSLF and the teacher education assistance for college and higher education TEACH grant programs.
Faults with Income-Driven Repayment
There are borrowers who claimed that they didn't get the appropriate amount of information regarding repayment plans. They have been really careless at planning the requests and this makes borrowers pay more.
In some cases, people have paid more to get a repayment plan which took them several months to qualify.
Making payments process horrible
FedLoan handles its payment process recklessly. In many cases, it has deducted the amount from borrowers' accounts where it has charged. As low-quality customer service, borrowers didn't get any acknowledgment of the problem and it kept deducting money from them.
You need to be very careful at choosing your loan servicing agency, do your research, ask people and then make a decision.
Contact FedLoan Servicing
You can stay connected with the company by going to their contact page which also has a FAQ section.
Their call center is open Monday through Friday from 8 am to 9 pm Eastern time. You can call FedLoan Servicing on this number: 1-800-699-2908 or 717-720-1985 for international callers).
For forms, you can fax them on 717-720-1628. FedLoan has different mailing addresses for different payment options, which are given in the following list.
You can mail payments to -
P O Box 790234
St. Louis, MO 63179-0234
You can mail a Direct Debit application to -
P.O. Box 3661
Harrisburg, PA 17105-3661
Letters and correspondence should be addressed to -
P.O. Box 69184
Harrisburg, PA 17106-9184
Mail credit disputes to -
FedLoan Servicing Credit,
P.O. Box 60610
Harrisburg, PA 17106-0610
Consolidation-related letters to -
FedLoan Consolidation Department,
P.O. Box 69186
Harrisburg, PA 17106-9186
If you need to contact the Office of Consumer Advocacy -
Pennsylvania Higher Education Assistance Agency
The Office of Consumer Advocacy,
1200, North 7th Street,
Harrisburg, PA 17102.