FedLoan Student Servicing Problems and Alternatives To Consider

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All borrowers looking to qualify for public service loan forgiveness (PSLF) or the TEACH grant program will have their loans serviced by FedLoan Servicing. However, there have been many complaints surrounding the management of PSLF, as many borrowers weren't informed of what they need in order to qualify. In 2017, the first borrowers became eligible for PSLF, but only 96 borrowers out of 29,000 applications actually qualified. So, if you are looking to get PSLF, make sure your loans are serviced by FedLoan Servicing and that you have a qualifying repayment plan.

FedLoan Servicing Student Loans Review

FedLoan Servicing was started by the Pennsylvania Higher Education Assistance Agency (PHEAA) to service student loans for the Department of Education. You have most likely heard of PHEAA, as it is one of the nation's largest providers of student financial services and also created American Education Services (AES), another student loan servicer. FedLoan Servicing and PHEAA are both not Better Business Bureau accredited, but the company has received an F based on the complaints filed, which include issues with payments and PSLF.

FedLoan has received various complaints for failing to inform borrowers about the requirements for PSLF, not handling payments correctly and having customer service issues. If you are having trouble with FedLoan as a servicer, you are not able to switch unless you refinance your loan with a private lender. Before deciding to refinance, you should first contact the company to resolve your issue, contact a third party, like the Department of Education or the Consumer Protection Financial Bureau (CFPB), to escalate the problem, and then, if things are still not working out, consider refinancing your loan.

Repayment with FedLoan Servicing Student Loans

If your student loan servicer is FedLoan Servicing, you should create an account using its online portal to make monthly payments, see your interest rate details and review past payments. Using its online services will make managing your loans easier, as you can even sign up for automatic payments and track your loan balance. However, if you would prefer to pay by mail, you can send checks made payable to FedLoan Servicing.

With federal loans, you are automatically enrolled in Standard Repayment, but you actually have eight different repayment options to choose from. As we mentioned before, FedLoan Servicing is the student loan servicer used to qualify for student loan forgiveness, but you must make sure that you have a qualifying repayment plan, meaning either Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR) or Income-Contingent Repayment (ICR). Standard Repayment, Graduated Repayment, Extended Repayment and Income-Sensitive Repayment don't generally qualify for PSLF. Be sure to reference the studentaid.gov website and talk with your servicer if you want to apply for student loan forgiveness.

How to Switch to a New Student Loan Servicer

Unfortunately, when you take out federal loans you are not able to switch your loan servicer, as the servicer is automatically assigned to you. Loan servicers are your main point of contact when repaying your loans, which can last up to 25 years. So, if you really can't stand your loan servicer, the best plan of action is to either consolidate your federal loans or refinance your loans with a private lender. Here is a list of some of our top choices for student loan refinancing:

Before you refinance to get away from FedLoan Servicing: Keep in mind that refinancing a federal student loan may lead to higher interest rates and you will lose federal repayment plans, deferment, forbearance and PSLF. Some lenders may offer similar policies, but there is no guarantee that these services will be carried out like federal loans. We don't encourage refinancing unless you are prepared to lose those options and have potentially higher interest rates.


  • on Earnest's secure website
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Earnest is best for borrowers who want independence in setting their own monthly payment and loan term. In order to apply, you must be able to qualify without a co-signer, with a minimum credit score of 650. Unlike the lenders above, the loans are serviced by Earnest, which has an A+ rating from the Better Business Bureau. It's important to note that the company was acquired by Navient, but the companies operate separately.


  • on SoFi's secure website
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SoFi stands out by offering competitive rates and employment assistance for borrowers, including career coaches and networking opportunities. The loans are serviced by MOHELA, which received an A+ rating from the Better Business Bureau and has had few public complaints in the past. The company also services loans for Laurel Road.


  • on CommonBond's secure website
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CommonBond is a good option for borrowers looking for low rates and flexible repayment plans. The lender even allows parents to refinance their Parent PLUS loans in their child's name to transfer the debt and hopefully qualify for a lower interest rate. CommonBond loans are serviced by Firstmark Services, which is a division of Nelnet. Firstmark Services is not accredited by the Better Business Bureau but has received a D rating based on complaints filed.

Refinancing with a private lender does not guarantee that you will receive better service, as almost all loan servicers have received several complaints. On top of this, a CFPB report from 2017 stated that nonfederal student loans actually receive more complaints as a whole than federal student loans.

FedLoan Servicing Customer Service and How to Submit a Complaint

If you've had enough of FedLoan Servicing and would like to file a complaint, you should check out these websites to report an issue or problem you have with the servicer.

FSA Feedback System: The Department of Education created the federal student aid feedback system to help borrowers file a complaint, report suspicious activity and provide positive feedback about your student loan experience. To file a complaint about your servicer, you must describe the problems you are having, how you would like them to be resolved and attach any relevant documents. The Federal Student Aid office will respond to your report as soon as they can.

Consumer Financial Protection Bureau (CFPB): The CFPB, another government website, allows consumers to report companies that they are having issues with. According to the CFPB, 97% of consumers receive a timely response to their issue. To file a complaint, you will be asked a few questions to categorize the problem you are having and then you will be prompted to describe what happened with the servicer.

Better Business Bureau (BBB): The Better Business Bureau works to resolve issues consumers are having with businesses. FedLoan is not BBB accredited but you can still file a complaint with the website. To file a complaint, you must give personal details, such as your name, address and e-mail, and describe the issues you are having. The BBB then forwards your report to the business and asks for a response within 14 days. If the company doesn't respond, they will send another request.

If you haven't already, you should try to contact FedLoan Servicing before using the websites mentioned above, to see if they can resolve your issue. You can contact the servicer by phone, mail or through their social media accounts. In order to e-mail FedLoan, you will need to sign into your account. The company also provides answers to a full list of frequently asked questions that you can explore before reaching out to the servicer.

FedLoan Servicing Contact Information

Common Problems with FedLoan Servicing Student Loans

FedLoan Servicing has received various complaints on the CFPB and Better Business Bureau sites. Although it is not BBB verified, the company still receives complaints and works to resolve them with the borrowers. Also, since FedLoan Servicing is owned by PHEAA, some of the CFPB complaints may not show up unless the borrower explicitly mentions the servicer. Here are some of the top complaints FedLoan receives:

Trouble with how payments are handled: Most borrower complaints about FedLoan Servicing on the CFPB and BBB have to do with repayment issues–either the borrower is being overcharged or payments are misallocated–or transferring loans over to the servicer to qualify for PSLF. Multiple borrowers complained about trying to change payments or repayment plans with FedLoan but had trouble contacting the servicer. To prevent this, try to send your requests as soon as you can to avoid any fees and give yourself time to talk with a FedLoan representative.

Receiving bad information about a loan: Another complaint many borrowers have is that they are receiving bad information about their loan. This includes discussing payments with FedLoan representatives, then seeing different dollar amounts on the online portal and, most commonly, not being informed about PSLF and the proper repayment plans to qualify. Your repayment plan will need to be either Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR) or Income-Contingent Repayment (ICR) to qualify for student loan forgiveness.

Problems with customer service: The other common complaint is that borrowers are having trouble contacting FedLoan, and when they actually get in contact, the information is unhelpful or incorrect. One borrower filed a complaint because it apparently took three years to consolidate her student loans due to her documents being lost, but she had to fill out and send the documents multiple times. Always have records of when you contact FedLoan. Even taking the extra step to make them restate or send what they stated to you in an e-mail can be helpful.

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