fed loan servicing : It’s overwhelming to juggle student loans, especially when you have more than one servicer and a difficult repayment plan. One primary player many borrowers of federal student loans have interacted with is fed loan servicing, commonly known as just FedLoan. As a U.S. Department of Education loan servicer, FedLoan was responsible for managing repayment plans, loan forgiveness programs and a variety of other related functions. Whether you’re a borrower in need of assistance or someone looking for an explanation of the history and relevance of FedLoan, this guide will offer a detailed look at what you need to know.
What Was fed loan servicing?
fed loan servicing, which is run by the Pennsylvania Higher Education Assistance Agency (PHEAA), was a student loan servicer. It was among a handful of servicers hired by the federal government to administer the repayment of federal student loans. FedLoan became most famous as the sole servicer for the Public Service Loan Forgiveness (PSLF) program.
For many borrowers, FedLoan was the company they thought of as they made payments, as they updated their income for Income-Driven Repayment (IDR) plans or as they applied for loan forgiveness programs.
Services Offered by FedLoan
FedLoan offered many different services including:
- Loan payment administration: Authorize monthly payments, select payment plans, and implement deferments or forb bearance.
- Income-Driven Repayment (IDR) plans: Assisting borrowers to enroll in plans that set payment amounts at a certain percentage of income and family size.
- Formerly the piecemeal management of employment certification and tracking qualifying payments for) Public Service Loan Forgiveness (PSLF).
- Loan consolidation help: Walking borrowers through the process of wrapping multiple federal loans into one.
- Customer service and support: Helping borrowers by phone, email or through online accounts.
Why Was FedLoan So Prominent?
What made FedLoan unique was its specific role in overseeing the PSLF program. Borrowers who work in government or nonprofit jobs have turned to FedLoan to keep tabs on their progress toward loan forgiveness after they made 120 qualifying payments. The move made FedLoan the only servicer for millions of PSLF-seeking borrowers.
This central role meant that even if your loans were initially held by another servicer (like Navient or Nelnet), they would be moved over to FedLoan if you applied for PSLF.
Criticism and Controversies
fed loan servicing and mismanagement. Common complaints included:
- Misapplied qualifying PSLF payments
- Hold up with the paperwork
- Misinformation from the commissioners
- Issues with updating income information for IDR plans
These concerns resulted in lawsuits and probes. A 2020 report from the federal Department of Education’s Office of Inspector General raised questions about FedLoan’s servicing performance in general, including when it came to tracking PSLF progress and communicating with borrowers.
The End of fed loan servicing
PHEAA announced in July 2021 that it would not renew its Department of Education contract. This would mean FedLoan Servicing would no longer be in the business of servicing student loans. The department started moving loans to other servicers, like MOHELA, Aidvantage and Nelnet.
The change occurred gradually throughout 2021 and 2022. We notified borrowers in advance and recommended that they download their account records from FedLoan prior to their accounts being transferred.
What If Your Loans Were With FedLoan?
Your federal loans would have previously been serviced by FedLoan; now you should be serviced by a different servicer. Here are the major steps you should have taken — or should take now if you haven’t already:
- Identify your new servicer. Log on to your Federal Student Aid (FSA) account to find out who now services your loans.
- Sign up with your new servicer. Keep your contact information and payment method current.
- Download past records. To be clear, if you haven’t already done so, download your payment history from your new servicer or request it from FSA.
- Re-certify your income-driven repayment plans. IDR plans typically have to be renewed annually, based on changes in income and family size.
Check PSLF progress. If you were working toward PSLF, make sure that your payment counts and employer certifications have successfully transferred.
Who Took Over FedLoan’s Job in the P.S.L.F. Starring Role?
The program is currently under the management of MOHELA (Missouri Higher Education Loan Authority). If you submitted a paper PSLF application or ECF, your loan and all of your PSLF information should have been consolidated into MOHELA.
All PSLF requests, payment tracking, and forgiveness determinations are now handled by MOHELA. You can sign into their portal or reach out to customer service if you need assistance with PSLF-related questions.
How to Reach Your Current Loan Servicer
If you’ve been in default and aren’t sure who your current servicer will be now that FedLoan is no more, here’s what to do:
- Visit https://studentaid.gov
- Log in using your FSA ID
- Click on My Aid
- You should see “Loan Servicer” somewhere in your loan details
Here are a few of the servicers that assumed FedLoan accounts:
- MOHELA – Also manages PSLF and more.
- Nelnet –Common loan servicing
- Aidvantage (formerly Navient) – Federal student loan servicer
- Edfinancial – Private Direct Loan servicing (non-PLUS)
Managing Your Loans After FedLoan_PAYMENT_PROGRAMS 2
With FedLoan now out of the mix, borrowers need to continue to advocate to make sure managing their loans is as easy as possible:
- Check your loan status often
- Keep records of all communications
- EVERY WEEK This behavior is pretty consistent for humanity; for changes in loan forgiveness eligibility
- Autopay to ensure you never miss a payment
- Keep up to date with student loan relief programs
As federal student loan payments resume after pandemic-related pauses, it’s a good time to reconsider your repayment plan and make sure you’re still on track — especially if you were counting on PSLF.
Final Thoughts
While FedLoan Servicing is no longer a part of the federal loan servicing ecosystem, the ramifications for millions of borrowers — particularly those pursuing Public Service Loan Forgiveness — still loom large. The move to new servicers such as MOHELA is aimed at better service and more transparency. But borrowers need to be vigilant, informed and protective of their progress, lest they lose that progress or even revert.
If you are still figuring out how to handle changes from FedLoan’s departure, visit StudentAid. gov, contact your new servicer and stay informed about federal loan servicing news.
