Understanding FedLoan Servicing: What You Need to Know
FedLoan Servicing was one of the largest federal student loan servicers in the United States. If you had federal student loans, there was a good chance that FedLoan managed your account. In this article, we will explore everything you need to know about FedLoan, its services, and what has changed since its contract ended.
What Is FedLoan Servicing?
FedLoan Servicing was a company that handled federal student loan repayment on behalf of the U.S. Department of Education. It was operated by the Pennsylvania Higher Education Assistance Agency (PHEAA) and was responsible for managing billions of dollars in student loans. Borrowers who had loans through FedLoan could access their accounts online, make payments, apply for income-driven repayment plans, and qualify for loan forgiveness programs.
FedLoan and the Public Service Loan Forgiveness (PSLF) Program
One of the main responsibilities of FedLoan was managing the Public Service Loan Forgiveness (PSLF) program. PSLF is a program designed for borrowers working in public service jobs, such as government or nonprofit organizations. To qualify, borrowers needed to make 120 qualifying payments while working for an eligible employer.
Since FedLoan was the sole servicer for PSLF, all borrowers pursuing loan forgiveness under this program had their loans transferred to FedLoan. This caused frustration for many borrowers due to processing errors and poor customer service.
Why Did FedLoan Stop Servicing Federal Loans?
In 2021, FedLoan announced that it would not renew its contract with the Department of Education. The decision came after increasing scrutiny over the company’s handling of federal student loans and the PSLF program. Many borrowers had complained about mismanagement, lack of clear guidance, and delayed processing of applications. As a result, the federal government transferred FedLoan accounts to other servicers, such as MOHELA, Aidvantage, Edfinancial, and Nelnet.
What to Do If Your Loans Were Serviced by FedLoan
If your loans were managed by FedLoan, you likely had your account transferred to a new servicer. Here are the steps you should take to ensure a smooth transition:
- Check Your New Loan Servicer: Log in to the Federal Student Aid (FSA) website to see which company is now handling your student loans.
- Update Your Contact Information: Make sure your email, phone number, and mailing address are correct in your new loan servicer’s system.
- Review Your Payment Plan: If you were on an income-driven repayment plan or pursuing PSLF, verify that your records have transferred correctly.
- Monitor Your Account: Check your loan balance, interest rate, and due dates to ensure there are no errors.
Alternatives to FedLoan for Managing Student Loans
With FedLoan no longer servicing loans, borrowers now have several other options for managing their student loans:
MOHELA (Missouri Higher Education Loan Authority)
MOHELA is now the primary servicer handling the PSLF program. If you were working toward PSLF with FedLoan, your account was likely transferred to MOHELA.
Aidvantage
Aidvantage took over many of the accounts previously managed by FedLoan. It offers standard repayment plans, income-driven repayment options, and loan consolidation services.
Edfinancial Services
Edfinancial is another major servicer that handles federal student loans. Borrowers can access their accounts online to make payments and manage repayment plans.
Nelnet
Nelnet is a well-established loan servicer offering repayment options, deferment, and forbearance solutions for borrowers.
Common Problems Borrowers Faced with FedLoan
Many borrowers had a frustrating experience with FedLoan. Some of the most common complaints included:
- Poor customer service – Long wait times and unhelpful representatives
- Errors in PSLF applications – Payments not being properly counted
- Difficulty processing payments – Late payments due to system issues
- Misinformation on repayment plans – Borrowers being placed in the wrong plans
If you experienced issues with FedLoan, you should review your loan records and contact your new servicer to correct any errors.
How to Contact Your New Loan Servicer
If you need assistance with your student loans after FedLoan’s exit, you can contact your new loan servicer using the following information:
- MOHELA: (888) 866-4352 | www.mohela.com
- Aidvantage: (800) 722-1300 | www.aidvantage.com
- Edfinancial: (855) 337-6884 | www.edfinancial.com
- Nelnet: (888) 486-4722 | www.nelnet.com
Final Thoughts on FedLoan’s Exit
FedLoan played a major role in managing federal student loans for years, but its departure has left many borrowers navigating a new system. While the transition may have been challenging, understanding your new loan servicer and staying proactive in managing your student loans will help you stay on track.
Make sure to check your loan details, verify your PSLF progress (if applicable), and reach out to your new servicer for any concerns. By staying informed, you can ensure a smoother repayment journey despite the changes in federal loan servicing.
