FedLoan Servicing owns the largest portfolio of student loan debt in the United States. Each year, millions of borrowers make payments through FedLoan to stay current on their student loans.
Learn more about FedLoan Servicing’s history and services below, plus information on FedLoan student loan forgiveness programs you might be eligible for.
Who is FedLoan?
FedLoan Servicing is one of the few student loan servicers approved by the Department of Education for handling federal student loans. It was originally established by the Pennsylvania Higher Education Assistance Agency (PHEAA) to support the DOE’s ability to service these types of loans for the federal government.
In combination with American Education Services (AES), which also operates under the PHEAA, FedLoan Servicing owns the largest portfolio of federal student loans in the United States. AES helps manage Federal Family Education Loan (FFEL) Program services, as well as private loans through its lending partners.
FedLoan Servicing manages roughly $320 billion in student loans, which comes out to $1 for every $5 in total student loan debt. The company is headquartered in Harrisburg, Pennsylvania.
What Does FedLoan Do?
FedLoan Servicing is a student loan servicer that helps borrowers get the money they need to attend college. Today, FedLoan handles a variety of federal student loan-related services that include repayment plans, consolidations, and student loan forgiveness programs.
FedLoan also handles all applications and inquiries for the Public Service Loan Forgiveness (PSLF) program. During its history, FedLoan has encountered controversy in its handling of the PSLF program, which is one of the most popular loan forgiveness programs offered by the DOE.
FedLoan Student Loan Forgiveness Programs
Due to FedLoan’s partnership with the Department of Education, there are several FedLoan student loan forgiveness programs available to eligible borrowers.
FedLoan and Public Service Loan Forgiveness (PSLF)
If you’re a public employee, or you serve full-time in AmeriCorps or the Peace Corps, you might be eligible for Public Service Loan Forgiveness (PSLF) through FedLoan.
To qualify for PSLF with FedLoan, you’ll need to make 120 consecutive, on-time payments towards qualifying loans. But once you’ve met all the requirements, your student loans could be forgiven completely.
Have you been denied for PSLF before? Check out the latest news on a Temporary Expanded Public Service Loan Forgiveness (TEPSLF), a new program that helps eligible borrowers obtain loan forgiveness even after having an application rejected.
FedLoan and Teacher Loan Forgiveness
If you’re a teacher with a Direct Loan or FFEL program loan, you might qualify for Teacher Loan Forgiveness, as long as you meet other job-related requirements.
One of the top requirements for Teacher Loan Forgiveness through FedLoan is teaching full-time at a low-income school or educational service agency. However, by meeting the programs requirements, you could be eligible for up to $17,500 in loan forgiveness on your qualifying loans.
Teachers with a Perkins Loan might also qualify for a Perkins Loan Cancellation if other requirements are met. You can learn more about a Perkins Loan Cancellation for teachers and other programs here.
FedLoan and Total and Permanent Disability (TPD) Discharge
To qualify for FedLoan’s TPD Discharge, you need to submit paperwork from Veterans Affairs, your doctor, or the Social Security Administration verifying your disabled status. If your TPD Discharge is approved, any balances remaining on your student loans can be erased by your lender.
As the exclusive servicer of the TPD Discharge program, all approved loans will be moved to Nelnet servicing in order to complete the forgiveness process.
FedLoan and Other Student Loan Discharges
Looking for other ways to free yourself from student debt? There are a number of FedLoan student loan discharge programs you might qualify for, depending on your circumstances. These include:
- School closure discharge
- False certification discharge
- Unpaid refund discharge
If approved, a student loan discharge through FedLoan could release you from your obligation to pay back your qualifying debt.
FedLoan and Income-Driven Repayment Plans
Most FedLoan student loan forgiveness programs require you to have certain types of loans for eligibility. If your student loans aren’t currently eligible for loan forgiveness, here are some income-driven repayment plans that could help you qualify:
- Income-Based Repayment (IBR) Plan
- Pay As You Earn (PAYE) Repayment Plan
- Revised Pay As You Earn (REPAYE) Repayment Plan
- Income-Contingent Repayment (ICR) Plan
- Income-Sensitive Repayment (ISR) Plan
Income-driven repayment plans typically offer lower monthly payments, longer repayment periods, and may qualify you for one or more student loan forgiveness programs that can help you become debt-free.
Recent FedLoan Loan Forgiveness & Repayment News
Here are some recent news stories about FedLoan Servicing that will interest you as a borrower.
April 2015: The Student Aid Bill of Rights is released by President Obama to help address problems with servicers. Considered part of Obama’s efforts on behalf of borrowers, it hopes to put an end to customer complaints against servicers like FedLoan.
August 2017: FedLoan Servicing is sued by Massachusetts Attorney General Maura Healey. In the lawsuit, Ms. Healey alleges that FedLoan is mismanaging the PSLF program by overcharging borrowers, not processing applications, and putting borrowers’ accounts into the wrong repayment plans.
October 2017: Loan forgiveness through PSLF begins, with FedLoan Servicing still overseeing the entire program despite the Massachusetts AG’s lawsuit.
January 2018: The Attorney General of Massachusetts sues FedLoan over its handling of TEACH grants and the PSLF program. According to the lawsuit, FedLoan converted one in three grants into loans with interest by not filing the right paperwork or completing it past its deadline.
February 2018: An internal memo from U.S. Education Secretary Betsy Devos is obtained. In the memo, Secretary Devos argues for protection of federal student loan servicers like FedLoan, saying they should be exempt from state lawsuits.
March 2018: Trump signs the $3.1 trillion Omnibus bill, allocating $350 million for the PSLF program, which is entirely managed by FedLoan Servicing.
May 2018: Under Secretary Devos, the DOE launches the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program. This new program helps borrowers who have been denied for the PSLF program get a second chance at loan forgiveness.
December 2018: The Education Department reaches out to TEACH grant recipients whose awards were incorrectly converted into loans with interest by FedLoan. The DOE says these loans will be reverted to grants and any payments on these loans will be refunded.
February 2019: The Department of Education’s inspector general releases a report claiming federal student loan contractors such as FedLoan aren’t being monitored closely enough and could be costing taxpayers millions of dollars by preventing delinquencies and defaults.
FedLoan Servicing is considered the largest student loan servicer in the United States due to its relationship with AES. With millions of current and former customers, many borrowers have shared their experiences with the servicer online.
While government agencies are no longer included on the website, FedLoan Servicing had an “F” rating with the Better Business Bureau based on over 100 negative reviews.
Listed under “Direct Loan Servicing” on the Consumer Affairs website, FedLoan Servicing currently has a one-star rating. Its sister company, AES, currently has a 3-star rating with nearly 300 customer reviews.
Is FedLoan Your Loan Servicer?
Is FedLoan your servicer and you’d like to make a switch? Options are available. One of these includes converting your federal student loans into one loan through a Federal Direct Loan Consolidation. The benefits of Direct Loan Consolidation include:
- Streamlining multiple student loan payments into a single monthly payment
- Getting one interest rate on your loans based on the weighted average of all consolidated loans
- Making your loans qualified for Public Service Loan Forgiveness (PSLF) if your profession is eligible
When you consolidate your student loans into a Direct Consolidation Loan, you get to choose which servicer will manage the new loan. Other servicers you can choose from include Navient, Nelnet, and Great Lakes.
If you’d like to convert your federal loans into a private loan, private student loan consolidation is also an option. Depending on your situation, a private consolidation loan could offer a lower interest rate, better repayment terms, and superior customer service. However, it could make you lose access to benefits that come with federal student loan programs, including loan forgiveness.
Interested in moving your loans away from FedLoan Servicing? Want to learn more about your student loan options? Simply fill out our free online form or call a student loan specialist by phone at (800) 771-6358.
STUDENT LOAN SERVICERS Student loan repayment has undergone tremendous reform over the past few decades. As part of these federal student debt relief initiatives, new options have become available to…
STUDENT LOAN SERVICERS Student loan repayment has undergone tremendous reform over the past few decades. As part of these federal student debt relief initiatives, new options have become available to those looking to benefit from today’s student loan forgiveness programs.Learn More