FedLoan Servicing is one of only four approved loan servicers for all student loans made by the federal government. It currently manages the largest portfolio of federal student loans in the US as well as the government’s Public Service Loan Forgiveness program.
A Brief History
The company was originally established as The Pennsylvania Higher Education Assistance Agency (PHEAA) in 1963 and quickly became one of the leading student aid organizations in the US. PHEAA currents services loans for millions of student borrowers and thousands of colleges and universities.
Today, PHEAA services student loans through two different entities: American Education Services (AES) and FedLoan Servicing. AES was created to guarantee and service FFELP loans and private student loans made through its lending partners. FedLoan Servicing was created to work with the Department of Education as a primary point of contact to help borrowers manage their federal student loans.
Here’s a brief summary of how FedLoan Servicing works:
- Borrowers apply for a federal student loan. This involves completing a FAFSA application, choosing a school, signing a Master Promissory Note (MPN), and going through entrance counseling before receiving their actual federal loans.
- The school receives the funds and the borrower is assigned a federal loan servicer. At this point, FedLoan Servicing may be assigned as the loan servicer and would then be the primary point of contact going forward.
Borrowers will need to setup an account with FedLoan Servicing to manage their loans and make payments after graduation. No student loan payments are due while the borrower is still in school (as long as they are enrolled at least half-time).
- After graduation, borrowers enter a grace period. This is typically a 6-month period where students can complete exit counseling and begin looking for work before their repayment term begins.
While payments are not required during this period, FedLoan Servicing encourages borrowers, if possible, to at least pay the accrued interest so it is not added to the principal after their grace period ends. During this period, FedLoan Servicing will send the borrower a Repayment Obligation Letter by mail which details all of their repayment information for the term of their loan.
- The repayment term begins. After the grace period ends, FedLoan Servicing will begin sending borrowers their monthly student loan bills. These are typically sent out several weeks in advance so they can make each payment on time. All payments will be made directly to FedLoan Servicing.
*If a borrower is having trouble making payments at this point, they may be eligible for one of several federal Income-Driven Repayment options currently available.
Once the student loan is paid off completely, FedLoan Servicing will send the borrower a Paid In Full letter as proof of total repayment.
FedLoan Servicing offers many options to help borrowers with their federal student loans, including:
- Extensive student loan information and resources
- Loan consolidation
- Repayment schedule and estimator tool
- Income-Driven Repayment programs
- Deferment and forbearance options
- Loan forgiveness and discharge programs
- Public Service Loan Forgiveness
- TEACH Grants
- Payment management and billing
- Payment history and tax documents
- Direct debit
- Delinquency and default
- Credit report dispute services
Borrowers can access these services through their account at FedLoan Servicing anytime through their online portal.
Reviews of FedLoan Servicing
BBB Rating: (Not Rated)
Consumer Affairs Rating: 1 star (out of 5)
Lendedu.com Rating: 1.5 stars (out of 5)
For more information, or to speak with someone at FedLoan Servicing directly, you can contact them by email or through the information below:
1200 N 7th St
Harrisburg, PA 17102