FedLoan Servicing was established in 1963 by the Pennsylvania General Assembly. The company services loans from the U.S. Department of Education. In addition to loan servicing, the company provides financial aid services, financial aid processing, and outreach. The company brings over fifty years of experience to the student loan servicing arena and uses some of its earnings to make college more affordable through the creation of state-managed student aid programs.
FedLoan servicing provides customer support and collection of loan payments from borrowers whose loans are currently in the repayment phase. In addition, they handle other issues that arise, helping borrowers to request deferment. FedLoan servicing makes most information available online.
From their online portal, borrowers are able to see and manage their loan. This includes seeing past payments, the amount remaining of each loan, the option to make loan payments online, and a section of informative frequently asked questions.
Borrowers can also find information online that will help them with consolidation, loan forgiveness, handling late payments, understanding their bills, managing their repayment, and information regarding alternative repayment plans.
What Special Services Does FedLoan Offer?
FedLoan offers customers a number of options to reach their customer service support team. This includes chatting online, calling, or e-mailing questions. In addition, there are convenient payment options, such as direct debit, payments over the phone, submitting payments via mail, or paying through the FedLoan online portal.
Unlike many other lenders, FedLoan allows customers the option to make unlimited payments per month. This is especially beneficial for borrowers who want to target a specific loan to pay it off early or those who find themselves with extra money at different times of the month.
A reward of a reduced interest rate of 0.25% is given to customers who opt to sign up for the Direct Debit service that FedLoan provides. Customers who sign up for this payment option will have payments automatically deducted from their savings or checking account each month.
There is an “Eligibility Quiz” to help borrowers understand if they may be eligible for a forbearance or deferment of their loan. This helps take the guess work out of knowing whether or not an individual borrower’s circumstances will qualify for one of those options. After completion of the quiz, borrowers are given a list of individualized options along with the links where they can find additional information.
FedLoan allows borrowers to change to an Income-Based Repayment plan, which may significantly reduce the amount of monthly payments. Alternatively, borrowers may choose to extend their repayment term if they are having trouble with high monthly payments.
How are my payments applied to my loan?
Payments are first put towards any accrued interest and fees that are due on the loan. After that, the remaining payment goes to defray the principal balance of the loan.
Can I consolidate my loans with FedLoan?
Yes, FedLoan does indeed offer consolidation services. Students who have multiple loans may benefit from loan consolidation. Instead of managing multiple loans each month, which may be serviced through different providers, FedLoan will combine individual loans into one large loan. Therefore, borrowers will only have to track one loan.
When can loans be consolidated?
Loan consolidation can take place at any time. Simply contact the customer service department to request information about loan consolidation. In addition, most federal loans can be consolidated along with private loans so long as it occurs through a private lender.
How do I apply for loan consolidation?
In order to apply for loan consolidation, the borrower must complete an application. Borrowers who are not certain whether consolidation could benefit them can take an online quiz. After applicants submit an application to have their loans consolidated, they typically receive a new interest rate on their loans. Borrowers also have the option to extend their loan repayment period during this time.
Can I make a one-time payment online?
Yes, borrowers can make a one-time payment online prior to the due date. If borrowers like the online payment option, they may want to consider enrolling in direct debit in order to save 0.25% on their interest rate.
What Are Some Common Issues with FedLoan?
FedLoan has a reputation for acquiring a large number of complaints. While it is rare for people to leave glowing reviews about a loan servicer, FedLoan seems to have accumulated a large number of incredibly negative reviews. Some reviews were from recipients of the TEACH Grants, who indicated they were cheated out of some money. Other claims state that FedLoan required unauthorized payments or that additional fees were assessed when payments that were made did not properly post to the loan. FedLoan is also frequently criticized for having sub-par and unsupportive customer service representatives. The general consensus appears to be that they often are unable to help borrowers solve problems that arise during their loan repayment.
Borrowers who have run into trouble with FedLoan, or borrowers who were assigned FedLoan and who would like to change providers, may want to consider either consolidating or refinancing their loans through another company. If neither of those options is feasible, borrowers may want to consider paying down their loans with FedLoan more quickly in order to reduce the amount of time that they will need to interact with the seemingly shoddy customer service department.
In order to repay loans faster, borrowers may want to consider either increasing the amount of their typical monthly payment or making a second payment each month with whatever extra money they can allocate to the loan (on top of paying their typical payment). For consumers who decide to pay extra on their loan, be sure to read more about how to target payments to maximize your money. Typically, payments are split up over all existing loans. However, borrowers frequently want to target one loan and pay that off before moving onto another loan. FedLoan’s payment processing is not set up to do this automatically for borrowers with multiple loans, but you can write to them to request that any additional payments be targeted to a specific loan.