MyFedLoan Review: Managing Your Student Loan Repayment

MyFedLoan might not be your federal loan servicer anymore. FedLoan Servicing, which operates the MyFedLoan online platform, was due to stop managing federal loan accounts when its contract with the Department of Education expired in December 2022.

Whether your federal loans have already been transferred away from MyFedLoan or soon will be, it’s imperative to stay on top of changes to your servicer. It’s the company that can help — or, unfortunately, harm — your chances of successfully navigating repayment.

Here’s our MyFedLoan review: everything you need to know about this outgoing servicer, when your account may be transferred and what options you have to manage your debt, both now and in the future.

What is FedLoan Servicing? The basics

FedLoan Servicing is a nonprofit organization run by the Pennsylvania Higher Education Assistance Agency (PHEAA). Despite its association with the Pennsylvania-based agency, FedLoan Servicing handles loans nationally.

Under the current structure, there are eight federal loan servicers. The government assigns a servicer to you when you take out federal student loans.

This means you might have ended up with FedLoan Servicing if you have one or more of the following student loans:

• Direct subsidized loans: These are need-based loans available to undergrads. The government covers interest charges while you’re in school, during your grace period and during any periods of deferment.
• Direct unsubsidized loans: Undergraduate and graduate students are eligible for direct unsubsidized loans, regardless of their financial need. You’ll pay interest while loans are deferred, including while you’re still in school.
• Direct PLUS loans: Graduate students and parents can qualify for PLUS loans — however, unlike with other direct loan programs, you can’t have bad credit. Interest isn’t subsidized with these loans.
• Direct consolidation loans: These loans allow you to combine all of your federal loans into one loan with one servicer.

If you’re not sure who your federal loan servicer is, you can call the Federal Student Aid Information Center at 800-433-3243.

Your FedLoan Servicing loans may soon be transferred

Though the Department of Education has already started transitioning accounts away from FedLoan Servicing, this change will happen at different times for different borrowers. If you haven’t received a notification via MyFedLoans (and your new servicer) in 2021, your loan remains in place in 2022. It’s imperative that you stay current on your account regardless of if and when the loan is transferred.

In December 2021, the Department of Education also announced that MOHELA would assume FedLoan’s role in servicing borrowers who are pursuing Public Service Loan Forgiveness and TEACH Grants.

As of March 21, 2022, the Education Department had not updated its guidance for borrowers waiting to be transferred to a new servicer. While you await word, taking the following steps can help to ensure you experience a seamless transition:

• Use StudentAid.gov by logging in to view and download the payment history for your federal loans, or contact FedLoan directly to ask for a complete record of your account.
• Update your address and other contact information with FedLoan.

Keep in mind, too, that once your loan is transferred, you’ll likely need to restore any account preferences you previously set with FedLoan. If you were enrolled in automatic payments, for example, you may need to sign up again to receive a related interest rate discount.

Using the MyFedLoan platform to manage your loans

If FedLoan Servicing is still your loan servicer, using the MyFedLoans platform is the easiest way to:

• Make payments
• Track your loan repayment progress
• Get information about forgiveness options
• Download the forms needed for deferment and forbearance, forgiveness and discharge, the TEACH grant and more

To get started with the website, you’ll first need to create an account. To do so, click on “Sign in” at the top right, then click on “Create one now” below where it says “Don’t have an account?”

The platform will prompt you to enter your name, email address, date of birth and Social Security number or account number. Then, it will ask you to create a username and password and set up identity verification questions.

Once you have an account and sign in, you can use the platform to view your loan balance, payment due dates and interest rates.

How to make payments to FedLoan Servicing

You can make student loan payments in the following ways:

• Direct debit: You can link a checking or savings account to your FedLoan Servicing account. The company will automatically withdraw your payment on the same day each month. As an added benefit, signing up for automatic payments can reduce your interest rate by 0.25%.
• App: Use the app to send your payments or make extra payments on your loans. You can also use the app to view your balance and get other information on your loan.
• Website: You can manually make one-time payments through the site.
• Phone: FedLoan Servicing has an automated phone line you can call at any time to make payments. Dial 800-699-2908 and have your loan account number and bank account routing number ready.
• Mail: If you prefer, you can mail a check or money order to the company. Mail your payments to: U.S. Department of Education, FedLoan Servicing, P.O. Box 790234, Louis, MO 63179-0234.
• Third-party servicer: You may choose to use a third-party bill payment servicer or schedule payments through your bank. However, FedLoan Servicing notes on its website that they don’t have the ability to offer interest rate reductions or other incentives for auto payments set up by a third party, so the direct debit program may be a better choice.
• Advance payments: You may set up advance payments up to 60 days in the future, for a maximum of eight advance payments per month. You can schedule these advance payments directly through the website.
• Targeted payments: FedLoan Servicing allows you to target extra payment amounts to specific loans, as long as you pay the minimum amount due on each loan. Making extra payments on your loans may reduce the amount of interest you pay overall and could save you money over the long term.

Repayment options through FedLoan Servicing

1. Standard repayment

The standard plan features a maximum repayment term of 10 years for unconsolidated loans, and up to 30 years for consolidated loans. The minimum monthly payment under this plan is $50.

2. Graduated repayment

This plan features monthly payments that initially are interest-only. Payments begin low, then increase every two years throughout a payment period with a maximum repayment term of 10 years.

3. Extended fixed or extended graduated repayment

Both plans feature a maximum repayment term of up to 25 years, so there’s a lower monthly payment than with the standard 10-year plan. You must have over $30,000 in outstanding direct loans or Federal Family Education Loans (FFEL).

4. Income-sensitive repayment

This is only for payments related to the FFEL program. Monthly payments are based on your gross monthly income.

5. Income-driven repayment plans

If you can’t afford to pay the full amount due, but could pay a portion of it, contact the company to apply for an income-driven repayment plan (IDR).

Under an IDR plan, the Department of Education caps your payments at a percentage of your discretionary income and extends your repayment term. Depending on your finances, your monthly payment could be much lower than it is today. You’ll pay more in interest over time, but an IDR plan could be helpful if you need relief right now.

The IDR plans available through FedLoan Servicing are…

• Pay as You Earn
• Revised Pay as You Earn
• Income-Based Repayment
• Income-Contingent Repayment

More alternatives for MyFedLoan borrowers

Along with payment plans that can help borrowers who are having a hard time making payments, you can access the following alternatives through FedLoan Servicing.

Remember that the last thing you want to do is miss payments and go into student loan default. Your loan will default when it’s over 270 days delinquent, and this can have a very negative effect on your credit rating. It could even ultimately lead to garnishment of your wages, withholding of your tax refunds and loss of eligibility for federal and state financial aid.

1. Deferment

If you can’t afford to make any payment toward your loan, you might qualify for a loan deferment. With a deferment, you can postpone making payments for a given number of months. If you have subsidized loans, the government will cover the accrued interest while the loan is in deferment.

Under the “Manage Repayment” section of your account, you can take a quiz to see if you fit the eligibility requirements before applying online for a deferment.

2. Forbearance

Forbearances are similar to deferments in that you can postpone payments. However, you can only pause payments for up to 12 months at a time with a forbearance. Unlike deferments, you are responsible for all interest that accrues, regardless of your loan type. You can take a quiz on the site to get a better idea of whether deferment or forbearance is right for you.

3. Student loan forgiveness

If you’re planning on pursuing Public Service Loan Forgiveness (PSLF), FedLoan Servicing is currently the only servicer that manages PSLF applications (though it is in the process of being phased out, as MOHELA will become the eventual PSLF servicer). In fact, if you have another servicer but are eligible for PSLF, the Department of Education will transfer your loans to FedLoan Servicing.

Through the online MyFedLoan platform, you can download and complete the Employment Certification Form. This is a form you periodically submit as you work toward PSLF. The servicer reviews the form to ensure you’re eligible for PSLF.

FedLoan Servicing is also the only student loan servicer that manages the TEACH Grant, which provides grants of up to $4,000 per year for students planning to enter the education field. (As with PSLF, MOHELA will also soon take over servicing of TEACH Grants.)

4. Change payment due date

You may choose to change your payment due date to a time when you know you’ll have more money in your bank account. You can set up this due date change through the website.

5. Consolidation

MyFedLoan notes that you may choose to consolidate your federal loans into one payment, which could lower your monthly output. You’ll apply for a consolidation loan directly through studentaid.gov.

6. Discharge

In some cases, you might be able to qualify for a discharge of your student loans. For example, if you’re permanently disabled and unable to work, you might be eligible for Total and Permanent Disability discharge.

You can find out about all the possible discharge options and how to apply on the loan forgiveness and discharge section of the MyFedLoan portal.

MyFedLoan reviews

Given that FedLoan Servicing was the de facto servicer for a Public Service Loan Forgiveness (PSLF) program that routinely declined applications (at least before a PSLF waiver was announced in October 2021), it’s no surprise that the company has received negative feedback.

FedLoan Servicing reviews in the Consumer Financial Protection Bureau’s complaint database show that borrowers have been upset about PSLF applications, credit reporting and general service, among other topics.

Overall, FedLoan Servicing ranked third among the top targets of federal loan-related consumer complaints in the CFPB’s annual reports in 2020 and 2021.

FedLoan Servicing lawsuits

FedLoan Servicing is a legitimate lender approved by the Department of Education, but it doesn’t have a perfect record. In 2017, the attorney general of Massachusetts filed a lawsuit against FedLoan Servicing’s parent company, PHEAA. The suit accused the company of making errors while managing PSLF and raising borrowers’ repayment costs. And in 2019, the New York attorney general charged that mishandling of Public Service Loan Forgiveness applications had led to a 99% rejection rate. Accusations of miscounting eligible payments and not giving proper information about how to attain loan forgiveness were cited among the agency’s failures.

The lawsuits are ongoing, and not necessarily unusual; other student loan servicers including Navient and Great Lakes Educational Loan Services have been the subject of lawsuits as well — still, these suits are worth noting.

If you have a problem with FedLoan Servicing or any other loan servicer, you should first try to resolve it directly with your servicer. If that doesn’t work, you can file a complaint with the Department of Education.

What to do if you want a new servicer

Although you can’t switch federal loan servicers, there is another way to change servicers if you’re unhappy with the one you’ve been assigned.

To get a new servicer, you can refinance your student loans with a private company. Through refinancing, you take out a new loan from a bank or financial institution and use it to pay off your current student loans.

The new loan is managed by a separate company and might have a different repayment term, interest rate and minimum payment. You could use refinancing to save money over time or to reduce your monthly payment. However, it’s important to know that you’ll lose out on federal loan benefits if you refinance.

You also may be able to use federal loan consolidation to get a new loan servicer. While you don’t get to choose your student loan servicer when you first get your federal loan, you can do so with a consolidation loan.

How to contact FedLoan Servicing

You can contact FedLoan Servicing by phone at 800-699-2908, Monday through Friday at 8:00 a.m. to 9:00 p.m. ET. If you’re calling internationally, contact them at 717-720-1885 during the same period. You can dial 711 for support for hearing- and speech-imparied callers.

In order to send an email, you must have an account and do so through a secure email program.

There are several mailing addresses:

Payments:
Department of Education
FedLoan Servicing
P.O. Box 790234
St. Louis, MO 63179-0234

Completed Direct Debit application forms:
FedLoan Servicing
P.O. Box 3661
Harrisburg, PA 17105-3661

Letters and 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 related letters and correspondence:
FedLoan Consolidation Department
P.O. Box 69186
Harrisburg, PA 17106-9186

The Office of Consumer Advocacy:
Pennsylvania Higher Education Assistance Agency
The Office of Consumer Advocacy
1200 North 7th Street
Harrisburg, PA 17102

FedLoan Servicing FAQs

If your question wasn’t answered in our and other FedLoan Servicing reviews, hopefully it’ll be addressed below.

What does MyFedLoan actually do?

MyFedLoan is the online platform of FedLoan Servicing, one of the outgoing contractors that works with federal loan borrowers to manage their debt repayment.

Is FedLoan Servicing legitimate or a scam?

FedLoan Servicing is a legitimate operation set up by the nonprofit Pennsylvania Higher Education Assistance Agency (PHEAA) to manage federal student loan repayment for assigned borrowers.

Is FedLoan Servicing a private lender?

FedLoan Servicing exclusively works with federal loan borrowers, though its parent company PHEAA has also established American Education Services to manage non-federal student loan accounts.