If you have a FedLoan, you didn’t have the option to pick your student loan servicer. But if you get assigned to FedLoan Servicing, which manages roughly a third of all federal student loan debt, you might be in for a painful experience.
In the summer of 2018, we surveyed hundreds of Student Loan Planner readers and asked them about their experience with their student loan servicers.
Almost half of the people who responded work with FedLoan, and they gave the servicer an average of 2.8 out of 5 stars.
The Top Student Loan Complaints About FedLoan Servicing
Out of the 176 responses we received about the FedLoan, 53 of them were complaints. Here we’ll cover the top four grievances FedLoan borrowers have and what you can do if you experience them.
1. Customer Service
We received 22 complaints about the FedLoan customer service team. “Unhelpful,” “incompetent,” and “inconsistent” were some of the terms that summed up the general response.
A customer would call in, for instance, and get different answers from different FedLoan customer service representatives. And it can take months to process simple requests.
I’ve had to call them at least 10-15 times in the past three years to get them to fix mistakes they’ve made,” wrote one reader. “I’ve had to have them audit my account twice. And last time the audit was supposed to take 30 days. It took over six months.”
2. Public Service Loan Forgiveness
If you’re working toward public service loan forgiveness (PSLF), expect to run into some obstacles with FedLoan Servicing. Eighteen of the complaints we received were about how the servicer handles the program.
The most common gripe is that FedLoan doesn’t calculate the number of payments that count toward the program properly. You need a total of 120 qualifying payments to get your federal loans forgiven, so it can be infuriating to find out that you’re short because your servicer isn’t doing its job.
We had to refinance instead because they didn’t give us an accurate payment count.”
– wrote one reader.
Another issue was the lack of good information about PSLF. Readers who called FedLoan to learn more about the program were met with customer service reps who didn’t fully understand how it works.
FedLoan’s issues with PSLF have gotten so bad that the Massachusetts attorney general filed a lawsuit against FedLoan Servicing in 2017. In the complaint, Maura Healey accused the servicer of causing public servants to lose benefits and assistance through PSLF and the Teacher Education Assistance for College and Higher Education (TEACH) Grant programs.
The attorney general is seeking restitution for affected borrowers, as well as penalties for the servicer.
3. Income-Driven Repayment
We received seven complaints about the FedLoan handling of income-driven repayment plan requests. These repayment plans can make it possible for borrowers who can’t afford their monthly payments to get some relief.
In some cases, customer service reps simply gave lousy information about what’s available and how the repayment plans work. In others, they botched plan requests, forcing readers to make larger payments that they couldn’t afford.
In one such case, one reader stated that FedLoan “could only fix it after several months, resulting in me paying on the standard repayment plan upwards of $800 a month when I should have paid $105.”
4. Making Payments
Six readers had objections to how FedLoan handles its payment processing. In most cases, the servicer didn’t apply payments to the outstanding loans accurately.
In one situation, the reader received a letter saying FedLoan needed to make an “adjustment” on their account. It ended up increasing the principal balance by $2,000, and when they reached out to FedLoan, they got no response.
In another, a reader kept seeing automatic payments coming out of their checking account even after they had paid off the loan.
It took a little of the glory away from paying off one of my loans, and it took a lot of work to make sure I was properly refunded.”
– the reader added.
What You Can Do If FedLoan Is Your Servicer
We’re not the only ones who have noted bad customer experiences with FedLoan Servicing. In 2017, the Consumer Financial Protection Bureau (CFPB) received 2,371 complaints about the servicer.
While you can’t choose your federal student loan servicer, that doesn’t mean you have to stay with them. At Student Loan Planner, we can help you figure out what to do with your loans, and that may include consolidating your loans with a new servicer or refinancing them with a private lender.
Whatever you choose, it’s important to know that you don’t have to put up with a bad servicer. Make sure to file any complaints you have with the CFPB, but also look for ways to find another company to work with that might offer a better overall experience.
Do you have any complaints about your servicer? Have you thought about changing?
Refinance student loans and get a bonus in 2019
I have fedloan and they ste horrible. I been calling for more than 5 months and things still aren’t getting handled. I want to go back to navient. At least you can pick which loans you want to pay off each month.
Sorry to hear Amelia. Unfortunately, there’s no way to do that at this time other than consolidating, which is probably not in your interest to do.
I DON’T UNDERSTAND HOW CAN THEY GET YOU TO PAY A LOAN THAT WAS IN THE EARLY 90’S. AND THE LOAN INTEREST IS 60,000.00 FOR A 3000.00 LOAN. SOMETHING IS WRONG WITH THIS PICTURE
Wow that’s terrible sorry to hear Annette