FedLoan Servicing Review 2019: How to Avoid Common Servicing Problems and Solutions

Without something like FedLoan Servicing, if you want to go to college and get a degree, you’re going to be paying a lot of money for the privilege.

Unless your parents managed to save up to pay for your college tuition, or you won a scholarship, you will have had to apply for a student loan. A majority of the time, it will be with FedLoan Servicing.

The US Department of Education issues you your student loan. They aren’t, however, the ones who collect the student loan repayments from you.

They have a huge workload, and cannot deal with the payments and other services that go with student loans. Instead, they have assigned other companies this job – known as federal loan servicers – who deal with your federal student loans.

But don’t worry – it is possible to pay off your student loan debt faster than you thought, especially if you get on the right payment plan, and live frugally.


What is Student Loan Servicing?

Collecting student loan repayments may sound like an easy task, but there are a lot of students, with a lot of loans.

Wikipedia says that almost 20 million Americans attend college every year. Around 12 million of them are borrowing each year to help with their fees.

Not only that, but a shocking statistic published by Make Lemonade showed that there are more than 44 million people borrowing money for college. The collective amount owed totals around $1.5 trillion!

A student loan servicer is a company who is in charge of handling that debt for you and collecting payments. They also handle other services such as repayment plans and loan consolidation.


How Does FedLoan Servicing Compare to Other Servicers?

The main student loan servicer is a company called FedLoan Servicing. There are other companies that are similar, such as Nelnet and Navient.

FedLoan Servicing collects your student loan repayments, deals with your repayment strategy, consolidation, missing payments, student loan forgiveness, and discharge.

The difference with FedLoan Servicing compared to other servicers is that they help to manage the Public Service Loan Forgiveness (PSLF) program.

The PSLF program is a government-run program. It forgives eligible borrowers for a portion of their student loan debt in exchange for working full-time in a public service job.

To be eligible, you’ll need to be making payments against a federal service loan and work for an eligible profit or non-profit organization.

Your employment generally needs to be with government agencies or organizations, 501(c)(3) organizations (the IRS defines these), or non-profit organizations which provide certain public services.

screenshot of FedLoan Servicing homepage


Best Options to Refinance Your Student Loans


Sofi is a private lender which aims to be a modern personal finance company in that everything they do is online.

You can refinance your student loan with them if you:

Please note that if you refinance a federal loan, any originally-offered benefits may no longer be available. Examples of these benefits include public service loan forgiveness and economic hardship programs.

You are able to consolidate both federal and private student loans with them. Consolidation simply means combining all of your loans into one. Refinancing is where you get a new loan with a new interest rate and term.

They offer low fixed and variable rates (variable APR of 2.47%-6.99%), online application and support, and no hidden fees. You’ll need a credit score of 650+ to qualify to refinance with them.

You can pre-qualify online within 2 minutes, with just a soft credit check which will not show up on your credit report. You can select your rate and term, and if you decide to go ahead, Sofi will consolidate your loan.

They have a 5-star rating on Trustpilot and are also rated 9 out of 10, based on nearly 2000 reviews.


Credible is not a student loan servicer, but they are able to look at all of them for you. They are a service that let you compare loans across a range of providers.

There are no fees for using this service. Your credit score will not be affected by checking the different lenders and rates.

You will need to fill out a simple form with your information, such as desired payment amount, rate, etc. After also providing your loan details, you should get your offer back in one business day.


LendKey is a lending platform and online marketplace where you can get private student loans or refinance existing loans, with local credit unions and community banks.

They have a handy student loan calculator which can help you see how refinancing could help to improve your finances. You can enter your loan amount, interest rate, and monthly student loan payment amount or the remaining term. The next step is to enter your credit score, the new term that you would like, and the loan type.

It’s worth noting that the calculator won’t be 100% exact. You’ll have to send in all of your documentation to get the most accurate rate.


What is FedLoan Servicing?

Problems Reported with FedLoan Servicing

There are many problems that are reported with FedLoan Servicing. If they are your student loan servicer and you don’t check your repayment plan closely, you may be surprised at what you find. 

You may not even realize that FedLoan Servicing handles your loan. Since your loan(s) can be moved to different providers without your knowledge, it’s worth checking who holds your account.

If you want to check, you can use the National Student Loan Data System to see the list of providers. You can still use this tool even if you have more than one student loan.

Make sure you check your FedLoan payment, as it may not be correct.

Is FedLoan Servicing a Scam or Legit?

FedLoan Servicing is definitely legit. They were appointed (but not run) by the US government, after all.

There have been many complaints directed towards FedLoan Servicing. In addition, in August 2017 they were sued by the Massachusetts State Attorney General.

FedLoan Servicing was accused of neglecting to properly conduct the handling of the student loans in their care. Additionally, their handling/management of the Public Service Loan Forgiveness and TEACH GrantTeacher Loan Forgiveness programs was brought into question. 

They have also been accused of mismanaging the debt in the form of converting grants into loans, adding interest, and preventing people from making required monthly payments to qualify for the federal Public Service Loan Forgiveness Program.

FedLoan servicing homepage screenshot


How Can These Problems Affect You?

This could affect you whether or not you are on either of the federal Loan Forgiveness programs. If you haven’t been keeping a close eye on your student loans, a whole host of issues may have developed without your knowledge.

Student loans can transfer between companies, often without your approval, or knowing about it.

Visit the National Student Loan Data System to look at all of your loans, to see who your servicer is.

Unfortunately, there are various problems that FedLoan Servicing have been causing, such as the following:

There are additional things that FedLoan Servicing has been accused of, so it’s highly advisable to double check which provider you are with, the interest rate etc, and if your payments have been processed correctly.

With the Public Service Loan Forgiveness program, you didn’t need to re-apply but would be eligible after 10 years of service.

FedLoan Servicing should be contacting you to let you know about your enrollment – so check in with them if you haven’t heard anything yet if you have served your 10 years.


Managing Your Student Loans With FedLoan

How to make a payment and repay student loans with FedLoan

There are a variety of ways that you can make payments to FedLoan, which are:

Applying extra payments to your FedLoan student loans

As with any type of debt, making extra payments to get rid of it faster is the best thing for you to do financially – if you can afford to do so.

Before you start throwing a lot of money at your student loan debt, make sure that you know all of the relevant information.

Specifically, take a look at:

You will also want to take a look at your budget and verify that you do have enough money to pay extra towards the loan, even if unexpected things come up.

FedLoan has a handy section on their site where you can figure out the best repayment strategy for you. You can select your specific goal and preferred repayment plan.

If you have extra money that you wish to put towards paying off your loans, you are able to target specific loans, e.g. your loan with the highest interest rate, otherwise, the extra money applies across all of your loans.

To make extra payments with FedLoan Servicing, head over to your Account Access, and enter your target amounts for the specific loans that you want to pay off.

Please note, if you do this, you will still have to make at least the minimum amount due for each individual loan, or your account will go past due.

You can keep on making overpayments online as above, but if you want to have any/all extra payments made in the same way in future, you can write to them with the following instructions (via email, mail or fax).

How to contact FedLoan Servicing

If you wish to contact FedLoan Servicing, there are a lot of different options available to you.

FedLoan Phone Number:

FedLoan Ombudsman Hotline (for help with payment, forbearance, bad customer service, etc.)

(717) 720-7605

Toll-Free (Monday-Friday 8am-9pm ET)


International (Monday-Friday 8am-9pm ET)


Hearing and Speech Impaired (Monday-Friday 8am-9pm)

Dial 711


717-720-1628 (for sending documentation)

Mail Check for a payment:

Department of Education

FedLoan Servicing

P.O. Box 53021

Atlanta, GA 30353-0210

Completed direct debit forms:

FedLoan Servicing

P.O. Box 3661

Harrisburg, PA 17105-3661

Letters and any correspondence:

FedLoan Servicing

P.O. Box 69184

Harrisburg, PA 17106-9184

Credit disputes:

FedLoan Servicing Credit

P.O. Box 60610

Harrisburg, PA 17106-0610

Consolidation correspondence:

FedLoan Consolidation Department

P.O. Box 69186

Harrisburg, PA 17106-9186

Office of Consumer Advocacy:

Pennsylvania Higher Education Assistance Agency

The Office of Consumer Advocacy

1200 North 7th Street

Harrisburg, PA 17102


Sign in to your FedLoan Servicing account and use Account Access to send an email to them.


Student Loan Repayment Options

In Account Access, you will be able to view your loan information and options that are available to you – click on ‘Repayment Options’.

There are several repayment plans that you can choose from:

Standard Repayment Plan

This is one of the best options, as it gives you the fastest payoff, and there are fixed monthly payments (which make it easy to budget for).

The monthly repayment minimum amount for this plan is $50, per loan program, with the maximum repayment term being 10 years for loans which are not consolidated or 30 years for consolidated loans.

Graduated Repayment Plan

This is another great option, as it gives you the fastest payoff, with lower monthly payments which gradually increase over time.

Although in the beginning, the payments will only cover the interest, so stop to consider this if you really want to pay it off quickly. This can be a good option for those who know they will be coming into more money in the future and just need a hand starting.

Extended Standard Repayment Plan

This is the option for you if you have a LOT of student debt – to qualify for this plan, you will need to have more than $30,000 in outstanding Direct Loans or FFEL Program Loans.

You will pay fixed monthly payments over an extended period of time – it’s up to 25 years as opposed to the Standard Repayment Plan of 10 years. Because of the length of the plan, the monthly payment will be smaller.

Extended Graduated Repayment Plan

The Extended Graduated Repayment Plan is essentially the same as the Extended Standard Repayment Plan, but with the idea that you will be able to pay off more in the future.

Income-Sensitive Repayment Plan

The monthly repayments on this plan are based on your monthly income, but the minimum payments must cover the interest rate every month as a minimum.

There is an extended plan period, with lower monthly payments, but you need to have the FFEL program loan in order to qualify.

The Repayment plan may be extended by 5 years (maximum), and because it is based on your income and this can change, you’ll need to reapply every year.

Repayment Plans Based On Your Income

These plans aren’t just based on your income, but they will also look at your family size, and state that you reside.

This type of plan is good for you if you have a lot of debt, are not sure if you can afford your monthly payments, and only have a small income.

You will need to apply for this loan via StudentLoans.gov – make sure that you have your FSA ID ready, and be aware that you will have to use the IRS Data Retrieval Tool during your application.


FedLoan Solutions: Here Are Your Options

If you want to get rid of FedLoan entirely (and we wouldn’t blame you for that!), you need to first check that it would be sensible for you to do so.

Before you start thinking, hang on – how could it not be sensible to leave them if there are all of these problems…bear in mind that if you are on any of the Student Loan Forgiveness programs, you will no longer be eligible for them if you leave FedLoan.

If you are not on one of those programs, you can look into moving over to another provider.

You may also want to look at whether to refinance your loans or consolidate them. In case you are not sure on that terminology, here is a quick overview:


Consolidation is when you combine lots of loans, into just one loan. The advantage to this method is that it’s easier to keep on top of your loans if they are all in one place.


Refinancing is when you also combine your loans into one – but with a big advantage over consolidation – you can get better rates.

The idea with refinancing is to get a better deal than what you are currently on – specifically the interest rate, which will lead to you paying less over time.

One of the best places to start is with Credible, as mentioned previously. They are not a Servicer, but they will be able to compare Loan Servicers for you, to find the best for your situation.

As mentioned previously in this article, we recommend Sofi, Credible, and LendKey.

Sofi is a private lender, who offer:


LendKey is one of our other top picks, who offer:

As with all of your finances, you need to keep track of them and do what is best for you and your budget.

Find out who your Student Loan Servicing company is, and all of the information on your loan – the amount, interest rate, length of term, which repayment plan you are on, etc.

Decide if you want to stay with FedLoan, or if you would be better off refinancing your loans with another company, such as the ones we suggested. Have a look on Credible to see if there are better options available.

You may feel like it’s a lot of hassle and effort – but it will be worth it to check that your loans are getting paid off, and getting paid off as fast as you possibly can. But make sure you check if it’s worth paying off your student loans aggressively (depending on the interest rate).