Updated January 12, 2018

FedLoan: What You Need to Know

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Is FedLoan your student loan servicer? Learn how to avoid common problems. Read this to find the best repayment options and contact information.

Loan Servicing: What You Need to Know

To enhance customer service, the DOE will randomly assign a loan servicer to people. These loan servicers work as the "middleman" between the DOE and you. They will handle your repayment and any administrative work on behalf of the DOE. All the federal student loans you received will likely be handled by the same federal loan servicing company.

One of the largest loan servicers is FedLoan. Read on to learn what FedLoan does and how their services may help you.

What Loan Servicing Means

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Loan servicing companies, like FedLoan, help college students and recent grads manage their loans.

For you, this means that they will keep track of how much you borrowed, so you can stay on top of your loans. They may even help you learn how to pay your loans off faster.

After your first loan disbursement, Fedload will take over to handle things like:

What Is FedLoan?

FedLoan is part of the Pennsylvania Higher Education Assistance Agency (PHEAA). PHEAA typically services two types of federal loans:

  • Direct: Loans funded directly by the Department of Education
  • FFELP/Indirect: Loans funded by a third party but guaranteed by the DOE

**As of June 30, 2010, guaranteed loans are no longer offered, except for those that are already in repayment.

Loan guarantee: Instead of funding a load, the federal government will sometimes guarantee a loan. In other words, they promise to pay back the lender if the borrower defaults. If the borrower defaults, the government then pays back the lender around 97% of the loan's value. The government will then takeover the loan and assign it to one of their guarantee agencies. These agencies then try to recoup the money from the defaulted loan.

What Happens If FedLoan Services Your Loan

If FedLoan services your loan, you will work directly with them. They will answer your questions and help you get any issues resolved. The same is true if you think you are eligible for loan forgiveness or an income-driven repayment plan.

You don't have to wait until your loans are in repayment to contact FedLoan. You can contact them while you're in school. To keep track of your loans while you're in school, just log into their system. Here, you'll be able to view your loan status, balance, and interest rates. This is also a great way to confirm your school enrollment with FedLoan.

If you receive a statement of payment due while in school, contact FedLoan immediately. They will be able to confirm your enrollment status. This will put your loan back into deferment, and you will be eligible for a six-month grace period once again.

FedLoan Phone Number: (800) 699-2908

Once you are out of school, FedLoan offers resources to help you estimate your monthly bill. This will give you an idea of what to expect after the grace period.

The grace period for many federal student loans is 6 months after graduation. This means you don't owe any payments during that time. After the first 6 months, your payments become due.

They also offer other tools, such as Interest Savings Calculators. With this tool, you can see how much money you could save on interest by making payments during the grace period. Because there aren't minimum payments due during this time, you could make your payments as little or big as you want.


A $10,000 student loan at 4% interest rate could save the following:

  • $50/month during the grace period (6 months) saves $73.14 in interest
  • $100/month during the grace period (6 months) saves $144.68 in interest

Though the savings might not look like a lot, every little bit will add up to help you reduce your overall repayment period.

Did You Know? The interest that accrued on your student loans while you were in school is added to your principal balance. Let's say you borrowed $10,000. You don't owe just $10,000 after your 4 years are up. Accrued interest may add $1,500 or more to the balance. Unless you have a subsidized loan, you are responsible for this interest.

Understanding Your Required Payments

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Before your grace period expires, FedLoan will send you a Repayment Obligation. You can view an example by clicking "view example" here.

The document will break down the

  • Account number
  • Loan types
  • Disbursement date
  • Starting repayment date
  • Payment amount
  • Payment due date

It will also show you the

  • Amount of unpaid principal balance
  • Amount of accrued interest
  • Total cost of the loan with interest

Standard Repayment Plan

Unless you discuss other options with FedLoan, you will be automatically placed on the standard repayment plan. You may choose a different option during your exit counseling session prior to graduation. If you didn't contact Fedloan prior to graduation, that's okay. You'll have other opportunities to do so.

The standard repayment plan is the fastest payoff plan offered for any student loan. With this plan, you have fixed monthly payments. If all payments are made on time, your loan could be paid off in 10 years.

FedLoan Repayment Plans

Not everyone can afford the standard payment though. If this is the case for you, get in contact with FedLoan.

FedLoan Customer Service:

  • Toll-Free: (800) 699-2908
  • International: (717) 720-1985
  • Fax: (717) 720-1628

They can offer you several payment plan options.

The right option for you depends on what you can afford. Payment plans are based on your discretionary income. This is any income you make that is higher than 150%, which is above the national poverty level. For example, if in 2017, you lived alone in the U.S. (excluding Hawaii and Alaska), anything you earned above $18,090 would be considered "discretionary income". You may pay between 10-20% of this amount depending on your circumstances.

Many programs allow you to have payments as low as $0 if you are unemployed or can't afford payments. The following programs also allow loan forgiveness:

  • Pay as You Earn
  • Income-Based Repayment
  • Income-Contingent Repayment
  • Revised Pay as You Earn

Loan forgiveness is offered after 20 years of payments with any of these programs. Get more details on these programs here.

You may benefit from consolidating your federal loans. If you have FedLoan Servicing and another servicer with different payments on different days, consolidation may in fact be the answer. You can log on to Federal Student Aid to view your options.

You may also qualify for graduated or extended repayment plans.

Graduated plans start with low payments, covering the interest only. They gradually increase as your income increases, thus covering the principal. Your highest payment would never go beyond three times your original payment.

Extended repayment plans extend the term of the loan, which helps to reduce the minimum amount due.

Both plans cost you more in interest. Ask FedLoan what the total cost of the loan is for each program. This way, you can see the true cost of each program.

If you are looking for ways to have your student loans forgiven (read: you don't have to pay them, the government just makes them go away), consider working in the public sector, either for the government or with a non-profit organization.

Through the Public Service Loan Forgiveness Program your loans will be forgiven after you make 120 qualifying payments while working as a full-time employee. A qualifying payment counts when you pay the full amount listed on your student loan bill on time every month. You'll just need to fill out an employment certification form to show that you are working in the public sector.

A note here: you do need to be on one of the income-driven repayment plans to take advantage of PSLF, but entering one means you'll be paying less for those 120 qualifying payments.

When Should You Contact FedLoan?

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Once you know FedLoan is your loan servicer, when should you contact them?

We recommend calling them as soon as you receive your Repayment Obligation. This gives you the chance to talk to them about your options. You could view your options online, but there is something about talking to someone live. You can ask questions in real time, take notes, and carefully evaluate your choices. The goal, at some point, is to pay your student loans off as fast as possible. The longer you take to pay them off, the more interest you will end up paying.

There are certain times when contacting FedLoan is crucial:

  • You don't understand your bill
  • Your address or contact information changes
  • You can't afford your payments
  • You need to change your due date
  • You received a bill while you were still in school
  • You have not received a bill

Note: If you don't contact FedLoan, your loan automatically goes into the Standard Repayment plan. This occurs whether you can afford it or not.

If you don't make your payments, it could harm your credit. If you can't afford any payments, you may be eligible for one of the above repayment plans.

In either case, staying in contact with your loan servicer is crucial. At the very least, you may be able to put the loan in forbearance or deferment, but you won't know that until you call them .

Forbearance: With Forbearance, you do not have to make your loan payments for up to 12 months. Your loan servicer may grant you forbearance during times of financial hardship. During this period, however, interest continues to accumulate and you are responsible for paying off that interest. Your loan servicer grants you three years of forbearance time to use whenever you may need it.

Deferment: Like forbearance, during deferment, you do not have a monthly loan payment due. The difference is that interest will not accrue on most subsidized federal loans or Perkins loans during this time. There are a variety of ways to qualify for deferment that can be found here. Like forbearance, you have three years of deferment time granted to you from your loan servicer.

Call FedLoan Help Desk at (800) 699-2908

Set Up Online Account Access

Setting up online account access with FedLoan offers several benefits. For starters, automatic payments ensure your payments are made on time. This reduces the risk of late fees and damaged credit. Federal loan servicers know that things happen and sometimes a payment may be missed. They will not report to any credit agencies for at least 45 days. Some may even give you 60-90 days before reporting any delinquencies.

As a bonus, FedLoan offers borrowers with automatic online payments a 0.25% break on their interest rate. This might not sound like a lot, but when you compound interest on thousands of dollars every month, it adds up. Consider it an easy way to save money. For monthly payments, if you choose to make multiple payments, set up an automatic payment for the minimum and then manually enter a second monthly payment. Doing so can also greatly reduce the amount of interest you will have to pay.

FedLoan also offers other payment plans to help speed up the payoff process:

  • Targeted payments: This option lets you choose which loan to pay down first. If you make more than the minimum payment, you can direct the extra funds. Maybe you want to pay loans with the highest interest rate or the highest balance. The choice is yours.
  • Pay ahead: You can opt to pay more than the minimum payment each month too. This may lower the total interest you pay over the life of the loan. Remember, there are no fees or penalties associated with paying your loans off early.

Contacting FedLoan

You can contact FedLoan via phone at 800-699-2908. You can also visit their contact page for more ways to get in touch.

FedLoan Reviews and Complaints

FedLoan is one of the largest student loan servicers, but that does not make it one of the most popular servicers.

Recently, the Consumer Financial Protection Bureau (CFPB) released a report outlining FedLoans failure to properly process payments and enroll borrowers in the PSLF process.

Maura Healey, the Massachusetts Attorney General, has even gone so far as to sue the company.


If you have a dispute with your loan servicer, you should first explore all options of reconciliation and document all communication. If there is no resolution and you are unsatisfied with the responses you've received from your servicer and the Department of Education, you can contact the Federal Student Aid Ombudsman Group. The Ombudsman Group is a neutral, 3rd party, confidential resource to resolve student aid disputes.

Remember, everyone has different experiences.

The best thing you can do is remain in contact and keep up with your monthly payments.

Unfortunately, you have no control over what student loan servicer you're assigned. In that case, how can you escape a bad situation should one arise?

Consider refinancing your loan, which will place your loans under the care of the refinancer. Weigh all of your options in this case and make sure that student loan refinancing is right for you.

Thinking of Refinancing?

Refinancing can be a great way to save money. You can refinance both your federal and private loans. Make sure that you are in a better financial situation than when you started school. Having a great credit score will help you to qualify for a better interest rate.

Here are student loan refinance offers you should not ignore:

Flexible TermsEarnest
Advanced DegreesDRB
Hybrid RateCommonbond

The Bottom Line

FedLoan services millions of student loans. Yours may be one of them.

If it is, contact them to discuss your financial situation and see which repayment plan works best for you. If you qualify for loan forgiveness somewhere down the line, FedLoan can help. Without hearing from you though, they will put you on the standard repayment plan. This may or may not be right for you.

Look closely at your options and choose the one that helps you get out of debt sooner rather than later.

Disclaimer: Opinions expressed here are those of the author's alone. Please support CreditDonkey on our mission to help you make savvy financial decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

More from CreditDonkey:

How to Lower Student Loan Payments

Should I Consolidate Student Loans

Student Loan Forgiveness

More Articles in Money Tips

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