fed loan services : If you are one of the millions of Americans dealing with student loan debt, you’ve probably heard of FedLoan, one of the largest federal student loan servicers. fed loan services has been a major a player in the U.S. Department of Education’s plan to aid borrowers with repayment. In this article, we will cover a deep-dive into what FedLoan is, its place in the federal student loan system, its offerings, what it used to offer and what products are available now, as well as alternatives that borrowers need to know about.
What Is FedLoan?
FedLoan, or fedload Servicing, had been one of the U.S. Department of Education’s authorized federal student loan servicers. fedload, which was run by the Pennsylvania Higher Education Assistance Agency (PHEAA), oversaw fedload student loans, issued bills, provided repayment programs, tracked Public Service Loan Forgiveness (PSLF) and assisted with a variety of other tasks. in particular was the sole servicer of borrowers who were seeking PSLF, meaning it played a pivotal role in the lives of public sector workers such as teachers, government workers and nonprofit staff.
ServicesHere are the main services that fedload offers:
Now offers no new accounts, though as of late 2022 it can be helpful to understand what the company used to offer for context and for former borrowers who were recently transferred to other servicers. Here are the primary services FedLoan offers:
Loan Repayment Assistance
FedLoan assisted students in selecting and servicing federal student loan payment plans such as the:
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan
- Image – PAYE vs REPAYE, Which IDR Plan Is Best?
Public Service Loan Forgiveness (PSLF) There is a loan forgiveness is a plan funded bthe federal government that helps leniend an one decade and then loan forgiveness to individuals employed in the public service sector.
FedLoan was the government’s main servicer for PSLF. Eligible borrowers working full-time for qualifying employers could apply to have their debt forgiven after they made 120 of those payments. FedLoan assisted in monitoring these payments and employment certifications.
Loan Consolidation Guidance
Borrowers would be able to consolidate their federal loans through Direct Consolidation Loan program. [click on image to enlarge] FedLoan provided the advice and support for this process, where borrowers were supposed to be able to consolidate their loans and make repayment easier.
Options for Forbearance and Deferment
FedLoan offered forbearances for short-term payment pauses for reasons like financial hardship, unemployment, military service or attending school.
Client Services and Account Management
Borrowers could make payments, switch repayment plans, update personal information and check loan balances both through online portals and over the phone.
Why FedLoan No Longer Takes New Loans
In July 2021, PHEAA said it would not renew its federal contract that expired in December 2021. The scene changed dramatically after the U.S. Department of Education started the process of moving all FedLoan accounts to other loan servicers, which in included:
- MOHELA
- Aidvantage
- Nelnet
- EdFinancial
This move was hoped to make the borrower experience better as FedLoan came under fire for poor management, including the handling of PSLF tracking and communication problems.
Leaving FedLoan: What Borrowers Need to Know
You should have received a notice about your new loan servicer if your loans used to be serviced by FedLoan. Here’s what to remember during and after the transition:
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Monitor Communications
Stay on the lookout for emails or mailed communications from both FedLoan and your new servicer. These are the types of notifications you can expect to receive, which will contain important details like your new login information, loan balances, and status of your repayment plan.
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Create a New Online Account
When your loan is transferred, go to the new servicer’s website and set up an account. This enables you to track payments, enroll in autopay and explore your repayment options.
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Check PSLF or IDR payment counts
If you’re a borrower seeking PSLF or if you are using income-driven repayment plans, you should double-check your payment counts and employer certifications. Mistakes may be made in transferring, so you want to be sure your records are correct.
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Download Records
Before FedLoan’s shutdown, borrowers were urged to download all of their payment histories, tax documents and correspondence. If you haven’t already, find out whether any of this information was transferred to your new servicer or call and ask for help.
Top Problems FedLoan Borrowers Experienced Some of the most common problems that led people to file a FedLoan lawsuit have included: 1.
FedLoan performed essential functions, but frequently came under complaint from borrowers. These are some typical complaints that have caught the eye:
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Erroneous Payment Counts: In particular among PSLF enrollees, some borrowers claimed that servicers miscounted their 120 qualifying payments.
- Complicated Communication: Numerous borrowers experienced mixed signals and slow responses that made loan management conversationally confusing and difficult.
- Inadequate Service: The long wait times for booking a FedLoan and the conflicting answers from administrative staff members frustrated people.
- Slow Forms Processing: Employer certification forms and PSLF applications were subject to long processing times, which in turn impacted borrower deadline.
Alternatives After FedLoan
Now that the government has stripped FedLoan of its servicing job, borrowers must deal with other servicers. Here is a primer on some of the major alternatives:
MOHELA
The official PSLF servicer at this time, MOHELA manages all Public Service Loan Forgiveness accounts. If you were on the path to PSLF via FedLoan, MOHELA has almost certainly taken over your account.
Nelnet
Nelnet, a major player among federal loan servicers, provides online account management, helps borrowers pick the right repayment plan and manage their account if they sign up for forbearance.
Aidvantage
Aidvantage now oversees many of the loans that FedLoan and Navient once oversaw. It allows IDR plans and other federal loan provisions.
EdFinancial
EdFinancial Services manages Direct Loans for borrowers and provides assistance for people in financial trouble or seeking to change repayment plans.
Where to Get Help With Your Federal Loans
You can find help, no matter who your current loan servicer is, through these resources:
- Federal Student Aid Website (StudentAid. gov): Log in with your FSA ID to see information on your loan, including your servicer and repayment plan options.
- Loan Simulator: User our interactive tool to give you an estimate of your monthly student loan payments and see which plans are right for you.
- Federal Ombudsman Group: If you’ve tried everything and you’re still having problems, the Federal Student Aid Ombudsman troubleshoots disputes.
Final Thoughts on fed loan services
fed loan services used to be the go-to federal student loan servicer, but its time has passed. For years it assisted millions of borrowers with repaying loans, seeking debt forgiveness and wading through complicated loan systems. But as Department of Education hopefully works to simplify and improve borrowers experiences getting out of debt, moving new servicers might be a good thing in the end.
As a borrower, knowledge is power staying on top of the situation, knowing where you stand and looking at your account every month is what ensures that you end up on the right side — whether that’s paying off the debt or qualifying for the forgiveness. Knowledge about the way FedLoan ran the program can also help you grasp your current servicer’s role and how to advocate for yourself in the federal loan system.
