FedLoan Servicing Federal Student Loans Guide


When you choose federal student aid, your loan could be managed by FedLoan Servicing, which services federal student loans only, not private student loans. Here’s what you need to know about your federal student loan from FedLoan Servicing.

FedLoan Servicing Federal Student Loans Guide

Also known as the Pennsylvania Higher Education Assistance Agency, FedLoan Servicing is one of four providers of federal student loan services approved by the U.S. Department of Education. When you take out a loan, the DOE assigns you a loan provider; you do not get to choose your own.

Here’s a guide to the services provided by FedLoan Servicing:

FedLoan Servicing Programs and Eligibility

FedLoan Servicing handles two main types of federal student loans: Federal Family Education Loan Programs and Direct Loans. FFELP loans were primarily purchased by the DOE from third-party lenders for the 2008-2009 and 2009-2010 academic years. Direct Loans were issued directly from the DOE, without the involvement of third-party lenders.

When you have one of these types of loans and are assigned to FedLoan Servicing, you’ll be eligible for these services:

Payment Options

The following payment options are available under FedLoan Servicing:

  • Direct debit
  • Online payment
  • Payment via mobile app
  • Payment via phone
  • Payment via mail
  • Payment via third-party bill-pay services

You can also schedule an advance FedLoan servicing payment on the website. One of the main advantages of the FedLoan Servicing direct debit option is that you get a 0.25 percent rate reduction on your student loan.

Tax Information

  • IRS Form 1098-E: Amount of interest paid
  • IRS Form 1099-C: Cancellation of debt, if applicable
  • Tax Summary Statement: When amount is not reported to IRS
Save for Your Future

Tax information on student loans is important because if you make a FedLoan payment that applies to interest, you can deduct up to $2,500 on your tax return.

Learn: 15 Ways to Pay Off Student Loans

Loan Payoff Information

You can call FedLoan customer service at any time to request your payoff information. The FedLoan Servicing phone number is 800-699-2908. You can also get this information via the FedLoan website.

Consolidation Options

When you have multiple student loans, it can be more convenient to house them under one service provider. When you consolidate, you could qualify for lower payments, if you extend the repayment period. And when you have variable-rate loans, those will become fixed under the MyFedLoan consolidation program. You could also qualify for repayment and forgiveness programs.

Federal Student Loan Repayment and Forgiveness Options

Federal direct student loans are eligible for the following repayment and forgiveness programs:

  • Pay As You Earn: Student borrowers
  • Revised Pay As You Earn: Student borrowers
  • Income-Contingent Repayment: Student or parent borrowers
  • Public Service Loan Forgiveness: Borrowers who serve in eligible professions

The first three options are income-based repayment plans; under the PAYE and REPAYE programs, for example, your monthly payment will not exceed 10 percent of discretionary income.

PSLF wipes out your remaining student loan balance if you have made 120 monthly payments on your loan and you work full time for a qualifying employer, typically a governmental or nonprofit employer. Working as a teacher, a nurse or a member of the military could also qualify you for debt reduction or elimination.

Save for Your Future

Additional repayment plans offered by FedLoan Servicing include the following:

  • 10-year standard repayment
  • 10-year graduated repayment
  • 25-year extended standard repayment
  • 25-year extended graduated repayment
  • 15-year income-sensitive repayment

The MyFedLoan website can help you select the best repayment option for you based on which of the following goals you input:

  • Lowest monthly payment
  • Paying as little as possible over the life of your loans
  • Quickest payoff strategy recommendations
  • Payments driven by your income
  • Lower payments now that increase over time
  • Work toward Public Service Loan Forgiveness

Related: How to Qualify for Student Loan Forgiveness Programs

Commonly Reported Problems With FedLoan Servicing

FedLoan Servicing is not without controversy, as they currently have a 97 percent negative rating from users of the Better Business Bureau website. Individual accounts seem to suggest that the company causes frequent headaches for customers, from long phone wait times to tripping up customers for making minor paperwork errors. Additionally, the U.S. Department of Education itself has noted that even written promises from FedLoan Servicing regarding loan forgiveness are not official, non-binding and can be rescinded at any time.

FedLoan Servicing is one of a limited number of federal student loan service providers, and they do provide numerous features and benefits for customers in light of the various drawbacks presented. Whether you’re assigned FedLoan Servicing or another service provider by the DOE, stay informed about any complaints or issues for your protection.

Up Next: 20 Companies That Help Employees Pay Off Student Loans


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