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What to expect with FedLoan student loan servicing

How to manage repayments and avoid common problems.

FedLoan, the arm of the Pennsylvania Higher Education Assistance Agency (PHEAA) that handles federal student loans, might be the most well-known student loan servicer out there.

It has a contract with the Department of Education to handle applications for Public Service Loan Forgiveness (PSLF), so there’s a chance you’ve dealt with it even if it isn’t your servicer. While it might be popular, it’s faced its share of criticism for mishandling parts of the repayment process.

How repayments work with FedLoan

You have several options to make your student loan repayments through FedLoan, from paying online to snail mail.

  • Tip: Have a check or your bank account information on hand — you need your routing and account number to sign up for direct debit or make any kind of online payment for the first time.
  • Can I make extra repayments?

    Yes, you can make extra repayments on your loan without any additional charge. FedLoan calls these targeted payments. Making a targeted payment isn’t as simple as making a standard repayment. You have to tell FedLoan which loans you want your extra payments to go toward.

    You have two options when it comes to making a targeted payment: online or through a special arrangement.

    • Why not just make a larger payment?

    Paying more than your loan balance puts your loan into what FedLoan calls paid ahead status. Here, your payment applies to your future bills. With this method, you can still save on interest and get out of debt faster — you’ll have paid off a future bill before the interest could add up.

    But you won’t be able to save as much as you would with targeted payments, which allow you to pay down your high-interest loans first.

    How to contact customer service

    There are four main ways to contact customer service: by phone, email, mail or fax. You can also get answers to frequently asked questions by going to the FedLoan website and clicking Contact Us in the main navigation bar.

    Over the phone

    • FedLoan’s toll-free number: 800-699-2908
    • FedLoan’s international number: 717-720-1985
    • Text telephone (TTY): After calling one of the above numbers, dial 711

    FedLoan’s phone lines are open weekdays from 8 a.m. to 9 p.m. ET.

    By email

    Log in to your online account and follow FedLoan’s instructions to send an email.

    Send mail

    Depending on what you want to send, FedLoan uses several mailing addresses:

    By fax

    You can fax documents to FedLoan at 717-720-1628.

    How to refinance your FedLoan student loan

    You can refinance your student loan by applying to pay off your loan with another from a private lender. Why refinance? If you’ve been struggling with FedLoan, refinancing is one of two ways you can switch loan servicers.

    Before you refinance, keep in mind that you stand to lose several benefits that you can only get with a federal loan, including income-based repayment plans, eligibility for forgiveness programs and a wide range of deferment and forbearance options. And you might not qualify for a rate as low as the one you already have.

    How to refinance your federal student loans

    How else can I switch servicers?

    If you have FedLoan as a servicer, your only other option for switching is to consolidate your federal loans. This involves merging all of your loans into a federal Direct Consolidation Loan with a new payment plan.

    This allows you to keep the benefits that come with federal loans — and may even open you up to a few more. But you’ll only be able to pick between federal loan servicers.

    Compare student loan refinancing options

    Name Product APR Min. Credit Score Loan amount Loan Term
    Purefy Student Loan Refinancing (Variable Rate)
    1.88% to 5.54%
    $5,000 - $300,000
    5 to 20 years
    Refinance all types of student loans — including federal and parent PLUS loans.
    Credible Student Loan Refinancing
    1.90% to 8.90%
    Good to excellent credit
    Starting at $5,000
    5 to 20 years
    Get prequalified offers from top student loan refinancing providers in one place.
    SoFi Student Loan Refinancing Variable Rate (with Autopay)
    2.25% to 6.39%
    Starting at $5,000
    5 to 20 years
    A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
    Splash Financial Student Loan Refinancing
    1.89% to 6.66%
    Starting at $7,500
    5 to 25 years
    Save on your student loans with this market-leading newcomer.
    Education Loan Finance Student Loan Refinancing
    2.39% to 6.01%
    Starting at $15,000
    5 to 20 years
    Lower your student debt costs with manageable payments, affordable rates and flexible terms.
    Earnest Student Loan Refinancing
    1.88% to 5.64% APR with autopay
    $5,000 - $500,000
    5 to 20 years
    Get a tailored interest rate and repayment plan with no hidden fees.

    Compare up to 4 providers

    How to avoid common problems with FedLoan

    As of December 2018, FedLoan has over 920 complaints filed against it with the Consumer Financial Protection Bureau (CFPB) and over 670 complaints filed with the Better Business Bureau (BBB). Here are the top issues students ran into when working with this servicer:

    Qualifying for public service forgiveness

    FedLoan broke the news a few times in 2018 after nearly all of the first round of applicants for the Public Service Loan Forgiveness (PSLF) program were rejected.

    What happened?

    The US Government Accountability Office conducted a report that showed the Department of Education hadn’t properly informed FedLoan staff of changes to the program. This affected the definition of a qualifying employer and qualifying payments, as well as general procedural changes. As a result, PSLF applicants who had followed directions to a T were getting denied.

    How to avoid it

    Don’t just reach out to FedLoan if you’re interested in applying for forgiveness — contact the Department of Education. If you’ve already been rejected, review the reasons why and work to fix it.

    In some cases, this might mean making extra repayments at a qualifying job on an income-based repayment plan. You could still be eligible for forgiveness — it just might not happen this year.

    You can also consider applying to other forgiveness programs.

    Updating or switching payment plans

    Another top complaint against FedLoan is how difficult it can be to switch repayment plans. Some borrowers complained it took too long, while others reported errors in the transition. Many stated it took several calls to customer service to find someone to walk them through the process or resolve their problem.

    How to avoid it

    Reach out to customer service before you switch your repayment plan to see if they can walk you through the process. Don’t wait around if you notice something off — reach out right away. It might take some extra time, but it could end up saving you money or giving you more affordable monthly repayments.

    How do I submit a complaint?

    You can submit a complaint through PHEAA’s Office of Consumer Advocacy. You can reach out by phone at 800-213-9827 on weekdays from 8 a.m. to 5 p.m. Or, send a letter to the mailing address for the PHEAA Office of Consumer Advocacy, listed above.

    If PHEAA can’t resolve the issue, you may want to file a complaint with the CFPB or the Federal Student Aid Ombudsman.

    Tips to pay off your loan faster through FedLoan

    • Pay off high-interest loans first. High interest loans gather interest at a faster rate. Pying these off first can save you more than treating all loans equal.
    • Consider a shorter term. Reach out to FedLoan to change your loan term to the standard repayment plan or another shorter term to speed up the process.
    • Tell FedLoan how to apply extra repayments. Unless you specify that you want your repayments to go toward the loan principal, FedLoan uses any additional repayments to put your loan in “paid ahead” status, which won’t save you much.

    What to expect with other student loan servicers

    Bottom line

    FedLoan might not have the strongest reputation, but it’s one of the most user-friendly federal loan servicers out there. If you’re not happy with it, though, you can always switch by consolidating your loans or refinancing with a private lender.

    Check out our guide to student loans to learn more about how they work and what your other options are.

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