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Student Loans

FedLoan Servicing Review: How They Manage Student Debt

When you take out a federal student loan from the Department of Education, you are assigned to one of a select number of approved loan servicers.

FedLoan, a subsidiary of the Pennsylvania Higher Education Assistance Agency (PHEAA), is one of them. Your loan servicer is the company you submit student loan payments to and the company that you deal with whenever you have questions or need help with any customer service issuers.

Applying for a loan directly through FedLoan isn’t an option. You must get your loan from the federal government and you can’t choose who services it—although you can sometimes change your servicer through Direct Loan Consolidation if you qualify to consolidate.

If you are assigned to FedLoan as your loan servicer, this FedLoan review will tell you what you need to know.

In this review:

Getting a Loan Through FedLoan

Because FedLoan is a student loan servicing agency, you can’t just obtain a loan directly through the company. Instead, you would need to apply for a federal student loan with the Department of Education and hope that you are assigned to FedLoan to manage your loan.

To get federal student loans, you need to complete the Free Application for Federal Student Aid (FAFSA). Completing this application ASAP is important because some kinds of federal aid are limited. You must provide basic financial information to complete the FAFSA, as well as details about what schools you are applying for or are attending already. If you are an undergraduate student who isn’t independent of your parents, completing the FAFSA will also require you to provide information on your parents’ finances.

Your credit score isn’t a factor when you take out most federal loans, although you can’t qualify for PLUS Loans with adverse credit. Some federal loans—Direct Subsidized Loans—are awarded based on financial need. Your federal aid package is also based on the school you are attending and other sources of aid you may be eligible for such as grant funding or scholarships.

>> Read More: Federal Direct Loans: Find Out How They Work

If you are approved for a federal student loan, you could end up assigned to FedLoan but there’s no guarantee this will happen. However, with FedLoan or any other federal student loan servicer—such as Nelnet, Navient, or Great Lakes—you will have a lot of flexibility when it comes to repayment options, including:

  • A standard 10-year repayment plan with fixed payments
  • A graduated repayment plan that increases payments over time
  • Several income-driven repayment plans where monthly payments are based on your salary and where a portion of your loans could be forgiven after making a certain number of on-time payments

Not all federal student loan servicers have proven to be adept and accurate when advising students about their options for different federal repayment plans, so it’s best to research the issue and consider getting financial advice from a professional.

Basic Information: Rates, Terms, Fees, & Limits

Because FedLoan services federal student loans, the terms of any loans you get will be determined by the Department of Education. Here’s what you need to know about interest rates, terms, and fees you can expect to pay on these loans:

  • The current interest rate on Direct Subsidized and Direct Unsubsidized Loans is 4.53% if you are an undergrad.
  • The current interest rate on Direct Unsubsidized Loans is 6.08% for graduate students and professional students.
  • The current origination fee for these loans is 1.059%.
  • The standard repayment plan on your loans is 10 years, but you have the option to stretch out repayment on various income-driven plans for up to 25 years. If you consolidate your loans, you could take as long as 30 years to pay them off.
  • You can choose a repayment plan with fixed payments; payments that gradually rise over time; or payments that change as your income rises or falls. You have the flexibility to change your payment plan over time.

The Benefits of FedLoan

Loans through FedLoan offer all the benefits of any federal student loans, including deferment and forbearance options to pause payments, as well as loan forgiveness options and flexibility in payment choices. You also get some benefits specific to having FedLoan as your servicer including:

  • The ability to manage your account using FedLoan’s mobile app
  • Helpful interactive resources designed to help you manage your loans, including a consolidation quiz to help you determine if consolidating federal loans would be helpful as well as a guide to understanding the correspondence you receive

The Downsides of FedLoan

There are also some downsides that you should be aware of, including the following:

  • FedLoan has received lower-than-average ratings from borrowers with FedLoan assigned as their loan servicer.
  • Borrowers have complained to the Consumer Financial Protection Bureau (CFPB) about incompetent customer service, including inconsistent answers to questions.
  • Some borrowers allege FedLoan does not properly count the number of payments that students have made when determining eligibility for the Public Service Loan Forgiveness program. Borrowers should become eligible after 120 payments and it can be a serious problem if a federal loan servicer fails to adequately track the number of qualifying payments made towards earning loan forgiveness.
  • Some borrowers claim that they weren’t given proper information about income-driven repayment plans and that they were instead steered towards forbearance. The paperwork is easier for forbearance, but interest continues accruing so it can make paying off your loan balance much more expensive over time.
  • Some borrowers complain that FedLoan doesn’t process payments properly. Complaints include payments being incorrectly applied or FedLoan continuing to withdraw automatic payments even after a loan has been paid off.

FedLoan Alternatives

Unfortunately, you don’t get to choose if FedLoan services your loan, so if you experience poor customer service, you have limited options.

You could consolidate your student loan debt to try to get moved to a different servicer, but not everyone is eligible for federal loan consolidation. You could also refinance with a private lender of your choice, but this would require giving up protections available only with federal student loans.

>> Read More: Refinance Student Loans: Compare the 8 Best Companies

How to Contact FedLoan

If you need to contact FedLoan:

  • You can call 800-699-2908. Customer service hours are Monday through Friday 8 AM to 9 PM EST.
  • You can email FedLoan. You will need to sign in to your account at in order to send a secure email.
  • There are different mailing addresses depending on whether you need to send payments; send a complete direct debit application form; send a letter or correspondence; send a credit dispute; or send a letter related to a consolidation loan. You can find the correct mailing address to use on the FedLoan website.

Bottom Line: Is FedLoan a Good Student Loan Servicer?

You cannot choose whether you have FedLoan as your servicer or not, so when you are assigned to FedLoan, you’ll need to make sure you minimize any servicing problems you could face. Keep track of payments and all correspondence and research repayment options carefully to make the best choices for you.