Review: FedLoan Servicing (PHEAA)

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Updated on Monday, January 21, 2019

Students throwing graduation hats

If you have federal student loans, you may remember that you didn’t get to choose who services them. Now that you’re in repayment, however, the ball’s in your court.

If some or all of your education debt rests with FedLoan Servicing, you could elect to consolidate with another federal servicer or refinance via a private lender. If keeping your loans where they are is best, you could use the servicer’s MyFedLoan platform to ensure your repayment is progressing the way you want it to.

Whether you’re new to FedLoan Servicing or a veteran borrower looking to make a change, read on to review your options.

What to expect from FedLoan Servicing loans

FedLoan Servicing, a branch of the Pennsylvania Higher Education Assistance Agency (PHEAA), has serviced FFELP loans and federal direct loans since 2009. MyFedLoan features a library of common repayment answers and questions — everything from making payments to switching repayment plans, and of course, consolidating.

FedLoan Servicing is the only servicer to handle Public Service Loan Forgiveness (PSLF) applications for the Department of Education. To manage your loans in other significant ways, however, you might need to head elsewhere to take action.

If you have trouble affording your monthly loan payments, for example, you could take a look at the servicer’s FAQ on income-driven repayment (IDR) plans. This will, in turn, direct you to complete an IDR application on

You might be able to accomplish all your student loan management in one place sometime in 2019. That’s when the Department of Education’s Next Generation Financial Services Environment — NextGen, for short — is slated to debut. Until then, expect FedLoan Servicing to merely be your first stop, not the final destination.

FedLoan consolidation vs. refinancing

If you hope to consolidate — or group — your FedLoan Servicing loans, you’ll need to apply for a direct consolidation loan via The application typically takes 30 minutes to complete.

With FedLoan consolidation, you could reap the following rewards:

If you prefer to keep your debt with FedLoan Servicing, you might select it as your consolidating servicer. If that’s the case, you could monitor your consolidation application progress via MyFedLoan. The process typically takes four to six weeks.

And then there’s student loan refinancing. Unlike FedLoan consolidation, refinancing can only be accomplished with a private lender. Through this measure, you’d also be able to group your loans.

If you or your cosigner has excellent credit, you could also potentially lower your interest rate by refinancing. This way, you could save money by paying out less over the life of your loan.

Before choosing the refinancing route, however, make sure you aren’t going to miss safeguards that are specific to federal loans, including:

  • Income-driven repayment plans
  • Mandatory forbearance
  • Loan discharge and forgiveness

What borrowers say about FedLoan Servicing

If you’ve experienced problems paying your FedLoan-serviced student loans, you’re not alone. More than 650 complaints about the servicer have posted on the Better Business Bureau’s website.

FedLoan Servicing has had other hiccups in recent years, including the attorney general of Massachusetts filing suit in the summer of 2017. The lawsuit alleged FedLoan Servicing mismanaged debt forgiveness programs for teachers and other public servants.

To boot, the Consumer Financial Protection Bureau’s (CFPB) database lists close to 8,000 complaints levied against PHEAA since 2012. Borrowers pointed to a range of issues, including:

  • Poor customer service
  • Incorrect handling of payments
  • Excessive fees

Of course, borrowers who received good service might be less likely to share their experiences online, but the complaints suggest FedLoan Servicing probably has room for improvement.

How to resolve issues with FedLoan Servicing

If you’ve experienced similar problems with FedLoan Servicing’s payment systems, make every effort to fix them. If you call MyFedLoan’s customer service and speak with someone who isn’t helpful, then don’t be shy about asking to speak with someone else or, better yet, a supervisor.

You can also email FedLoan Servicing, call 1-800-699-2908, fax 717-720-1628, or write to this address:

FedLoan Servicing
P.O. Box 69184
Harrisburg, PA 17106-9184

If you need to resolve a credit dispute — perhaps a payment never went through, and it now shows up as late on your credit report — fill out the servicer’s Direct Credit Dispute Form and mail it to this address:

FedLoan Servicing Credit
P.O. Box 60610
Harrisburg, PA 17106-0610

How the Student Aid Ombudsman Group can help

The Student Aid Ombudsman Group can help mediate disputes between borrowers and loan servicers. The key word is mediate – the ombudsman will not take a side in the argument. Its job is to review all information provided and respond impartially.

You can contact the Student Aid Ombudsman Group after completing a self-resolution checklist formatted by the Federal Student Aid office.

If you feel that your servicer has been detrimental to your student loan payoff progress, you have every right to complain. Plus, if the ombudsman doesn’t receive complaints, it won’t be aware of the issues.

The easiest way to get in touch with the ombudsman is to use the FSA’s online feedback system. You can also send a letter or form to this address:

U.S. Department of Education
FSA Ombudsman Group
P.O. Box 1843
Monticello, KY 42633

If you’d rather call, the number to use is 1-877-557-2575. You can also fax your letter, form or additional documentation to 606-396-4821.

Finally, you can also submit complaints to the CFPB. Like the Ombudsman Group, the CFPB acts as an objective third party. It promises a response within 15 days of receiving your complaint. However, the CFPB’s top student loan official resigned last year in protest that the agency wasn’t doing enough to protect borrowers. (Note, Student Loan Hero, like MagnifyMoney, is a subsidiary of LendingTree.)

Don’t ignore issues with FedLoan Servicing

That said, however, being unhappy with FedLoan Servicing probably isn’t a good enough reason to consolidate or refinance your student loan debt. These measures can help you get closer to ending your education debt, but they’re not right for everyone.

Consider the pros and cons of refinancing, for example, before you trade your federal loan protections for a lower overall interest rate. The same goes for FedLoan consolidation.

No matter the next stage of your repayment, be proactive with all of your loan servicers and document your communication. Remember that no one cares about your situation more than you do.

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