FedLoan Servicing Student Loans: Pros and Cons Considered.
FedLoan Servicing Student Loans: Those borrowers eligible to apply for repayment of public service loans (PSLF) or the TEACH grant program must receive their loans from FedLoan Servicing. There have been many concerns about PSLF management, however, as many borrowers have not been told about what they need to apply.
The first borrowers were registered for PSLF in 2017, but only 96 borrowers were actually approved out of 29,000 applications. So, if you’re eligible for PSLF, make sure that FedLoan Servicing covers your loans and that you have a qualified repayment plan.
FedLoan Servicing Student Loans Review
The Pennsylvania Higher Education Assistance Agency (PHEAA) introduced FedLoan Servicing to support the Department of Education student loans. You’ve most likely heard of PHEAA because it’s one of the nation’s largest providers of financial student services and has created American Education Services (AES), another student loan service provider.
All FedLoan Servicing and PHEAA are not accredited to the Better Business Bureau, but the company received an F based on the complaints filed, including payment and PSLF problems.
FedLoan has received a number of complaints for failing to inform borrowers of PSLF criteria, failing to properly manage transactions and having problems with customer service. If you have trouble with FedLoan as a service provider, unless you refinance your loan with a private lender, you will not be able to switch.
Before you decide to refinance, you should first contact the company to solve your problem, contact a third party such as the Department of Education or the Financial Bureau for Consumer Protection (CFPB) to increase the problem, and then consider refinancing your loan if things still don’t work out.
Repayment with FedLoan Servicing Student Loans
You can create an account using its online portal to make monthly payments, see the specifics of your interest rate and check past payments. The use of its online tools would make it easier to handle your loans. This is because you can also sign up for automatic payments and track your balance of loans. When you prefer to pay by mail, however, you can give FedLoan Servicing checks made payable.
You are automatically enrolled in Standard Repayment with federal loans. However, you actually have to choose from eight different repayment options. As mentioned earlier, FedLoan Servicing is the student loan servicer used to apply for student loan forgiveness, but you have to make sure you have a qualified repayment plan. PSLF usually does not count for regular repayment, phased repayment, extended repayment and income-sensitive repayment. 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
However, you are unable to change your loan service provider once you take out federal loans, as the service provider is immediately allocated to you. Loan service providers are your main contact point when repaying loans that can last up to 25 years. So, if you can’t really handle your mortgage service provider, the safest action plan is either to combine your federal loans or to refinance your loans to a private lender. Here is a list of some of our top refinancing solutions for student loans:
Keep in mind that refinancing a federal student loan can 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 they will be delivered as federal loans. Unless you are willing to lose those options and have potentially higher interest rates, we do not support refinancing.
For borrowers who want independence, Earnest is best for setting their own monthly payment and loan term. To submit, you must be able to qualify with a minimum credit score of 650 without a co-signer. By comparison to the borrowers above, Earnest, which has an A+ score from the Better Business Bureau, handles the loans. It is important to note that Navient bought the company, but the companies are working separately.
SoFi stands out by giving lenders competitive rates and job assistance, including career mentors and incentives for networking. MOHELA, who received an A+ score from the Better Business Bureau and had few public concerns in the past, manages the loans. The organization also offers Laurel Road loans for facilities.
CommonBond is a good option for lenders who are searching for low rates and flexible options to repay. The lender also allows parents in the name of their child to refinance their Parent PLUS loans to move the debt and eventually qualify for a lower interest rate. CommonBond loans are serviced by the Nelnet subsidiary of Firstmark Services. The Better Business Bureau does not accredit Firstmark Services but has been awarded a D score based on reports received.
Refinancing with a private lender does not guarantee that you will receive better service as there have been many reports received by almost all loan service providers. In fact, a 2017 CFPB report stated that non-federal 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.
The Education Department has developed the federal student support review system to help borrowers file a complaint, report suspicious activity, and provide positive feedback on your student loan experience. You will explain the issues you have, how you want them to be addressed and add any relevant documents to file a complaint about your servicer. The office of Federal Student Aid will respond as soon as possible to your report.
The CFPB, another government website, allows consumers to report that they have problems with companies. 97 percent of consumers receive a timely response to their problem, according to the CFPB. You will be asked a few questions to categorize the problem you are having to file a complaint, and then you will be prompted to describe what happened to the service provider.
The Better Business Bureau is working to solve the problems that consumers have with companies. FedLoan is not approved by BBB, but you can still lodge a website claim. You must provide personal details such as your name, address and e-mail to file a complaint, and describe the issues you have. The BBB will then forward your report to the company and request a response within 14 days. If the organization is not responding, another request will be sent.
If you haven’t already contacted FedLoan Servicing, you can try to find out if they can solve your problem before using the websites listed above. Through mobile, mail or through their social media accounts, you can contact the service provider. You will need to sign in to your account to e-mail FedLoan. The organization also provides answers to a complete list of frequently asked questions you can discuss before you hit the service provider.
FedLoan Servicing offers a wide range of repayment plans to choose from, from the default 10-year repayment plan to revenue-driven repayment options such as RePAYE and IBR, as well as extended fixed repayment, revenue-sensitive repayment and phased repayment.
If you want to make payments at school or after graduation during the six-month grace period, you can do so, and FedLoan Servicing is very flexible in terms of its overall payment structure, also allowing you to choose your own payment due date according to your personal finances.
Following the Rules
You should expect FedLoan Servicing to follow the rules as one of the main loan providers trusted by the U.S. Department of Education, upholding all federal student loan benefits and providing the appropriate discounts where applicable.
It also supports both in-school and grace period deferments and guarantees that you keep the same student loan rates that you saw while applying for federal student loans, without any hidden charges or adjustments.
Ease of use
In recent years, FedLoan Servicing has made significant improvements in its user-friendliness, introducing a simple smartphone app that you can access to make payments, accessing your account details, such as loan balance, enjoying paperless billing advantages, and simply handling your loans more conveniently.
The app is available on both phones from Apple and Android. FedLoan also helps you to monitor your account and pay by mail or online.
Student loan forgiveness is the vision of many students, and one of the most significant loan forgiveness services around FedLoan Servicing is in charge of: PSLF. By making 120 qualifying installments, the Public Loan Service Forgiveness Program will wipe out all the outstanding debt. This allows you to pay off 10-year loans and then get the remainder forgiven, if you serve as a nurse or teacher in a public service capacity and also fulfilling the other eligibility requirements.
Other Benefits and Special Programs –
FedLoan Servicing is also responsible for TEACH Grants, which is a program that can offer up to $4,000 of support to students working towards a career in teaching. In addition, FedLoan Servicing can offer exclusive benefits to active members of the military like the ‘no accrual of interest benefit’ which reduces your student loan interest rate down to 0% for a period of up to five years.
Common Problems with FedLoan Servicing Student Loans
On the pages of the CFPB and Better Business Bureau, FedLoan Servicing received numerous reports. While not being checked by BBB, the organization nevertheless receives grievances and works with the lenders to address them. Here are some of FedLoan’s top complaints:
Trouble with how payments are handled:
Many borrower reports on the CFPB and BBB about FedLoan Servicing relate to servicing issues. Either the borrower is overwhelmed or payments are misallocated–or loans are shifted to the service provider to apply for PSLF. Several lenders spoke to FedLoan about trying to change payments or repayment plans, but had difficulty getting in touch with the service provider.
Receiving bad information about a loan:
Most lenders have another concern that they receive bad information about their loan. It involves negotiating payments with members of FedLoan, then seeing varying dollar amounts on the online portal and, most importantly, not being told of PSLF and proper repayment plans for qualifying.
Problems with customer service:
The other common complaint is that borrowers have difficulty contacting FedLoan, and the data is either unhelpful or inaccurate when they finally get in touch. Another borrower filed a complaint because it apparently took three years for her student loans to be resolved due to the loss of her paperwork, but she had to fill out and return the documentation several times.
The final word on FedLoan Servicing
When dealing with FedLoan Servicing, be sure to keep yourself updated about how your loans and repayment plans operate. Keep track of your transactions as well as any contact you have with them. This is a good practice for any kind of loan or financial transfer you may experience in the future.