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?
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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
NEVER use FedLoan Servicing if you have a problem or need to speak with someone who knows that they are talking about. They NEVER respond to emails; nor do they respond to letters. No problems are ever addressed. FedLoan has made a mistake on my hardship forbearance, and they will not answer my letters or emails, which I have been making since September 2018 (it is now January 2019). I called and spoke with a representative, and all she did was read from a pre-written script. Issue still not solved.
Call their ombudsman line. That might help. Number starts with 717 listed on this post: https://www.studentloanplanner.com/fedloan-servicing-cost-us/
When president obama said that loans less than 40,00 would not be paid that was around 2015/16 I was one I send some payments for the interest and that was supposed the end of my journey but Fedloan know is sending me letters and Ibeen answered the letters but they still wont do nothing at this time I am not going to pay nothing regardless they send to the credit offices
I don’t believe President Obama ever said that, so if you heard that from somewhere it was likely a scam organization. You should be on an income driven plan or you’ll wreck your credit and they’ll garnish your wages at 15% of discretionary income. Might as well pay 10% instead and not wreck your credit. That’s if the loans are federal BTW.
I have kept consistent payments to Fedloan Servicing for nearly 20 months. Continuing to make my monthly payments, for the past 6 months they mysteriously can’t locate each payment. Every month since September of 2018 I have received notices that I haven’t made a payment. Then I’m forced to do extra efforts to prove each payment was made after the funds were cashed. At first I used money gram and they didn’t like that form of payment. So I switch to bill pay where my bank sends out the payment vrs Fedloan pulling out the funds. They don’t like that, so now they are a Sitting on my payments to the point that I call and frustratingly ask, “what now?!” Every month for six months it’s a different problem. For six consecutive months. Once I prove the payment was made there’s no personal apology. Instead the month that follows is a new issue with them receiving my payments that hold new obstacles for me to jump over. There’s never corrective action. They over paid themselves with an extra five bucks a month for over a year and contacted me to inform me they needed to reimburse me, which they never have done. I asked them to apply it to the principal which I’m yet to see. I requested twice for a detailed payment history which I’m yet to receive as well. Phone calls at work during work hours, emails, statements by mail and text messages add up to a huge harassment lawsuit. It takes from my ability to work with a piece of mind, withdraws me from time with family and children. Instead of chasing my already made payments, I and my kids have the right to have me help them develope. The stress and confusion and attempts to communicate with this service provider is a huge task and makes it nearly impossible to do the right thing.
Sorry to hear that Robert. You need to contact the FedLoan ombudsman line. (717) 720-7605
These guys are horrible. While working on an income driven program they reported false charges to my credit my scores dropped 75 points their only response is it will be fixed once your situation is resolved…. complete lies they have yet to fix the plan after I’ve submitted and resubmitted the information. The workers even say that your paper work is correct but they will send you emails that they need more information. Please don’t waste your time with these people. The only reason they have my information was because I work for a nonprofit. IT IS NOT WORTH IT especially for people who actually try to pay their loans off. I hate them with every atom in my body!
Sorry to hear Moniet. There was a recent post in the NY Times about that, except the person’s credit score dropped by hundreds of points because of FedLoan: https://www.nytimes.com/2019/02/22/your-money/student-loan-forgiveness-credit-score.html
Why do fedloan service have the ability to defy the laws of consumers credit files? Meaning if bankruptcy comes off of a person credit file after a certain amount of years, how is it possible fedloan can continue on your file 25, 30 years or indefinitely.
Because in most cases these are federal student loans with special rules set by Congress. Even if it wasn’t FedLoan, it’d be another company applying the law that Congress made. However, FedLoan has certainly done some very bad things to people by messing up their credit score. I believe the NY Times documented a case where someone’s score was trashed by FedLoan after their loan was gone.