When you first got your federal student loan, 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 particularly painful experience.
In the summer of 2018, we surveyed hundreds of Student Loan Planner® readers and asked them about their experience with their federal loan servicers.
Almost half of the people who responded worked with FedLoan, and they gave the servicer an average of 2.8 out of 5 stars.
Out of the 176 responses we received about FedLoan, 53 of them were complaints. Here are the top four grievances FedLoan borrowers shared and what you can do if you experience them.
1. Poor 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. One respondent said:
“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. 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.”
If you do need to get in touch with Fedloan’s customer service department, there are a few available options:
Phone: (800) 699-2908, Monday through Friday, 8 a.m. to 9 p.m. (EST)
Email: Send a secure email through your online Fedloan account.
Fax: (717) 720-1628
Mail: For correspondence:
FedLoan Servicing
P.O. Box 69184
Harrisburg, PA 17106-9184
2. Incorrect calculation of Public Service Loan Forgiveness payments
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 issue was that FedLoan doesn’t calculate the number of student loan payments that count toward the program properly. You need a total of 120 qualifying payments to get your federal loans forgiven for the Public Service Loan Forgiveness Program, so it can be infuriating to find out that you’re short because your servicer isn’t doing its job. One survey respondent wrote:
“We had to refinance instead because they didn’t give us an accurate payment count.”
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 representatives who didn’t fully understand how the program works.
FedLoan’s issues with PSLF have gotten so bad that the Massachusetts attorney general Maura Healey filed a lawsuit against FedLoan Servicing in 2017. In the complaint, Attorney General 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.
Other lawsuits against FedLoan regarding PSLF have been filed since.
3. Mishandling of income-driven repayment plans
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 representatives simply gave incorrect information about these repayment options and how the repayment plans work. In others, they botched plan requests, forcing borrowers to make larger payments that they couldn’t afford.
In one such case, one survey respondent 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. Improper payment processing
Six readers had objections as 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 survey respondent said they received a letter saying FedLoan needed to make an “adjustment” on their account. The servicer ended up increasing the principal balance by $2,000, and when the borrower reached out to FedLoan, they got no response.
In another example, a respondent said they kept seeing automatic payments coming out of their checking account (sometimes referred to as direct debit) 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.”
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 2019, the Consumer Financial Protection Bureau (CFPB) received 1,829 complaints about the servicer.
Although 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 plan may include consolidating your loans with a new servicer to service student loans or refinancing them with a private lender. If you’re experiencing financial difficulties, you can also look into deferment and forbearance. If you’re in default, you may look into loan consolidation or rehabilitation. You may also qualify for an interest rate reduction if you sign up for auto-pay.
Whatever you choose to do, it’s important to know that you have options if you’re fed up with a bad servicer. Make sure to file any complaints you have with the CFPB, and 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?
Take our 11 question quiz to get a personalized recommendation of whether you should pursue PSLF, IDR forgiveness, or refinancing (including the one lender we think could give you the best rate).
Take Our QuizAll rates listed above represent APR range. 1Commonbond: If you refinance over $100,000 through this site, $500 of the cash bonus listed above is provided directly by Student Loan Planner. Commonbond disclosure. 2Earnest: $1,000 for $100K or more, $200 for $50K to $99.999.99. For Earnest, if you refinance $100,000 or more through this site, $500 of the $1,000 cash bonus is provided directly by Student Loan Planner. Rate range above includes optional 0.25% Auto Pay discountEarnest disclosures. 3Laurel Road: If you refinance more than $250,000 through our link and Student Loan Planner receives credit, a $500 cash bonus will be provided directly by Student Loan Planner. If you are a member of a professional association, Laurel Road might offer you the choice of an interest rate discount or the $300, $500, or $750 cash bonus mentioned above. Offers from Laurel Road cannot be combined. Rate range above includes optional 0.25% Auto Pay discount. Laurel Road disclosures. 4Elfi: If you refinance over $150,000 through this site, $500 of the cash bonus listed above is provided directly by Student Loan Planner. Elfi disclosure. 5Sofi: If you refinance $100,000 or more through this site, $500 of the $1,000 cash bonus is provided directly by Student Loan Planner. Rate range above includes optional 0.25% Auto Pay discount. Sofi disclosures. 6Credible: If you refinance over $100,000 through this site, $500 of the cash bonus listed above is provided directly by Student Loan Planner. Credible disclosure. 7LendKey: If you refinance over $150,000 through this site, $500 of the cash bonus listed above is provided directly by Student Loan Planner. Rate range above includes optional 0.25% Auto Pay discount.
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
The exact same thing has happened to me except mine is 97,000.00 I can’t for the life of me figure out how? Did you find a legitimate answer?
Contact your congressman and things will be resolved much more quickly! A lot of people don’t know to cut through all of the red tape. That is what your congressman is there for ! Good luck
Agreed!
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.
Not sure why all the complaints, but it seems to me that these individuals do not take the time to read all the information. Not saying it’s an easy read, but after I examined the information provided, I was able to get all the things done I needed. Loans consolidated, PSLF, IDR and I keep track of every single payment. This is just my opinion, but individuals need to be responsible for what they sign up for and accept. No way anyone should let a 3000 loan rack up interest charges of 60000. Just seems like people are irresponsible, then need someone to blame for their lack of attention and effort. IJS
It was way harder for people with loans issued prior to 2010. It’s easier for folks taking out debt today bc it’s all by default on the same loan type
Marquis
I agree everyone should follow through with agreements they may have signed up for BUT there is always room for improvement, especially when there’s so many people involved. There are also others that may have mental illnesses, or may have a few children and find it hard to sit down and read a recipe let alone a book after working 12 hrs a day 6 days a week. If at anytime an individual call and ask for assistance, it should be as easy and as assisted as when they granted that loan. NOT HARRASSED and half answered questions from multiple representatives that are not familiar with the individual that called for HELP. Ijs
So many lenders out there. I currently have Fedloan. How do zo go about finding a lender that will not screw me. I am currently unemployed.
Well then fedloan is your only option because you want to use PAYE or REPAYE to pay 0 Leticia.
How is it legal for FedLoan to take payments from me since 2017 and the principal balance only going down less then $100?
Payments are probably around 0.5% of your balance each month I’m guessing? You have to pay at least 1% of the total balance each month to watch it fall
How is that legal though? Mortgages have you pay the interest first and then start to pay off the principal after a period of time. The student loan has you pay interest only and even if that changes over time where you start paying the principal later on, they can just sell the loan to another company and the process starts over. My loan has been resold probably 4 times. Thanks for the replies.
Student loans often also have a bunch of accrued interest that has to be paid off first. It’s just the way theyre built even if its crummy
In my experience with Fedloan Servicing, their default stance (which I think is predatory) is to apply any excess funds that you pay over the monthly amount to the next monthly statement, and to only apply funds to paying interest and not principle. If you can get through to a rep on the phone, you can ask them to change your account settings, such that any excess funds left over in a month after interest has been paid go against principle. I imagine that other lenders may have similar default policies that you can change.
Today marks 363 since I wrote to FedLoan regarding their screw-up of my PSLF/REPAYE recertification. In that time, I’ve called them (what a waste!) twice and written them 19 times. It took them 11 months to issue a written response (and only then because I got the FSA Ombudsman involved). They answers are Kafkaeque. “…it may take up to 20 business days” to respond, but no response ever comes, or they claim “we attempted to contact you by phone” 41 days later…in response to a letter that explicitly asked for a written response.
There’s no cure for stupid, and FedLoan isn’t going to get any better. I’ve decided to just sue them. Let them explain how it’s my fault that they can’t calculate a repayment correctly (or even consistently), and how it’s my fault that they can’t respond to a letter.
Wow “I’ve contacted them 19 times” you’d think that would be an amazing bit of evidence in any suit. Btw I’ve heard folks complaining to the CFPB and contacting their Senator / Congressperson is most effective
I’ve been told to contact a student loan officer: [email protected].
Good Luck. They are idiots at FedLoan.
Well that’s the email for my friend Jay who’s a student loan lawyer. There are others as well pretty skilled in combating the servicers.
Contacting your congressman is very easy! Look up who your congressman is and make a phone call it’s that simple sincerely! Stop wasting your time dealing with idiots.
I got approved for false certification discharge and met all the requirements to be 100% discharge. But now fedloan are saying It’s only a portion that’s going to be discharge. I received the approval letter since may 2018. Now every time I call to ask why it’s only potions or why haven’t it been discharge yet. No one can answer me. What should I do because I met the requirements for full discharge? And No one will answer me about when it will be discharge?
Wow not sure I’d reach out to a student loan lawyer. [email protected] is one you could try
Travis – thank you very much. I’ve been pulling my hair out for months. I’ll give the attorney a call.
I’ve been with Fedloan for a few years now and it’s been a nightmare the entire time. I have nothing positive that has come from my experiences working with them generally conversations with them are so infuriating I’m split between swearing and crying. I was forced to transfer my loans to Fedloan due to the PSLF program. I have almost 5 years of service HOWEVER due to endless fuckups from Fedloan the last 6-8 months of payments do not count towards my service for PSLF. I made several targeted payments to a specific loan that is only $300-400 trying to pay it off in Nov and Dec. Because I did that Fedloan decided to adjust the amount on the top of my bill from my IDR amount. So instead of 65.50 it read 65.12. So for the last several months I’ve been making that payment thinking that was correct since it was at the top of my bill. Since it was not the amount assigned from my IDR none of those payments count. This comes only 2 months after getting the IRD fixed following a 4 month administrative forbearance while they figured out my IDR paperwork. During this forbearance I also loose an interest rate incentive for making my payments on time. I appealed the decision since I was never informed that going on the forbearance would change anything about my account and I had specifically asked but I lost the appeal. So they added it back to my account. I spend countless hours on the phone calling trying to straighten out my account and confirm information given by their employees that 9 out of 10 times is incorrect. I’ve called all over trying to figure out some of the things they’ve done to my account and to figure out what they’ve said because they are so inconsistent and contradict each other. I have been told by their staff that even if they give me incorrect information and I fill out paperwork incorrectly based on the guidance THEY gave me it’s still my fault. They take no responsibility whatsoever for their complete incompetence and never once have they apologized for the laundry list of fuck ups. To get PSLF I can only qualify by SERVING MY COMMUNITY and they don’t pay people well when you do that it took me 4 ½ years to get over $15 an hour and that’s with my bachelor’s degree. So when trying to explain why I couldn’t afford when they tripled by IDR payment their staff interrupted me to say they “didn’t care” that’s not going to sit well with anyone let alone someone who is barely keeping it together. I cannot imagine another company where you can consistently preform at such low levels and still stay employed because the way they treat their clients just wouldn’t fly pretty much anywhere else.
Only way that changes is if Congress had a big enough earful that they didnt renew the contract
I hate this fucking company!!!
I have the same complaints you mentioned in the article. But, I tried to have my loan discharged because I didn’t graduate highschool or get a GED. They denied it and turned around and asked for more information. I sent them the information and they turned around and denied it asking for more information. The highschool I went to was a private school that closed a few years ago and the principal retired. I have no way of getting the information they requested. I informed them of that and they sent me on a wild goose chase trying to get the information. Then, they also told me that department of education denied it and I should contact them. I spent 2 days chasing down what I needed only to find out it was for nothing. Then, department of education informed me that they did not deny it that it was fedloan. Not only are they incompetent, but liars as well
Fedloan Servicing somehow made a mistake on my account summery page that reflected my IDP/PSLF monthly payment of $110 tripling for the month of August 2019 to $340. I called to see why this was and learned that “someone made a mistake.” Customer service rep had no answers and offered to manually override the payment and put the loans in forbearance for the month (August) until the issue was resolved. I offered to make my regular payment, however, the rep indicated that it would reflect as an underpayment and explained that forbearance would be better. Fast forward one week (today) – log in to my account and now my account summary shows a payment of $3,078.91 due 9/2. Again, I called and spoke to a supervisor (Sylvia #601506), because the rep couldn’t help at all, and was told that the “forbearance was completed wrong” and she would override the payment. She acknowledged their (FedLoan) mistake and offered no other information with regards to who/why/how the mistake was made. This is not typical business practice and raises red flags in my book. She said to make my regular payment of $110 despite the account showing a payment due of $3078.91. I’m very frustrated with the way this is being handled and am concerned about my loans being properly managed and the effects this may have on my credit report. I hope FedLoan Services fixes the issue and gets my loans back on track. I’M COMMENTING ON THIS SITE FOR DOCUMENTATION PURPOSES ONLY.
I’m on a consolidated parents plus loan into a income driven repayment fed loan . My payment is $820 a month I can only pay $400 . Our total income is $76000. My loan is almost due on on forbearance now . They say there may be some help if I default. I have sent letters of hardship . Is there any other way to get them to help or lower the payments. I talked to the ombudsman with no help . Thanks
Possibly putting it on an extended plan but not with an income driven plan.
I regularly receive FedLoan service emails infected with tracking images that are sending unknown type and amount of data from my devices every time I open those emails. After three weeks of denial, asking me to call, indecision and inaction from the FedLoan support team, I would like all account holders to know. Thank you.
Acording to FERPA, they should not be allowed to use personal data for ad campaigns. I receive emails regulatly infected with tracking pixels or web beacons from Fedloan, even in those confirming my payments. After a month of contstant emails, they are completely unhelpful and passive. Something to watch out for, if you care about your family privacy.
My loans were forgiven when I worked for the County of Delaware in Media pa
That’s great to hear!
I have asked for an amortization letter to close on my home and was told I was not getting one. I have never seen poor customer service in my life. I will be filing a complaint or a lawsuit against them If they refuse to send me the letter. I wish I could have stayed with Nelnet.
They give you inaccurate information at every turn. You’re told payments will count and your “tracker” towards loan forgiveness will not “start over”, only to find out that it’s simply untrue and you’ll never get out. The capitalized interest added nearly $70k to my balance (you read that correct). I’ve paid over $90k already. I now went from owing about $60k for undergraduate and grad school to more than $170k fooling up with consolidation and IDR and Revised Pay as you Go BS that they recommended. Something isn’t right. You enter these programs hoping to get your payment to a place you can afford and keep up with consistently.
You have a degree you received during a recession and likely aren’t using, are underpaid with an inflated title. You want to settle down, but can’t afford to have children or buy a home because of these student loans that they’ve tacked on interest to to a point that it’s no longer recognizable.
They also don’t care about the cost of living, rent or other bills. If you family size changes due to a loved one in your household passing: they don’t care. This literally happened to me and because my family size decreased, my payment doubled when I honestly updated my recerification report when due that following month. My payment doubled while I searched for new housing to downsize and settle that loved ones estate and relocated kiddos. FedLoan does NOT care, even if you’ve never missed a payment until then.
You overpay and it throws them off completely, by the way. They don’t know how to properly apply the payment and it won’t go towards principle. They treat it as a split payment and the next month your payment is lowered. Ignore that and keep paying the full amount no matter what.
I recently asked for an account audit AND to know how many payments I have left before meeting the general loan forgiveness they’ve promised for the past few years ( I have proof of this promise via email). They couldn’t provide this on request and I’m told I’ll have to wait while they “get it together”.
How is it legal to be in business and NOT keep good books? I don’t trust anything now. I don’t trust them to keep track of amounts accurately or to count payments correctly. They are predatory. Paying what you OWE isn’t enough, they want thousands upon thousands more than you could ever imagine. Credit me for what I’ve paid accurately and give us our freedom.