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.
Other lawsuits regarding PSLF have come since.
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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Amelia says
January 7, 2019 at 3:15 pmI 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.
Travis Hornsby says
January 7, 2019 at 7:55 pmSorry 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.
ANNETTE says
January 9, 2019 at 10:48 pmI 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
Travis Hornsby says
January 10, 2019 at 12:38 amWow that’s terrible sorry to hear Annette
Richard Seth Nedom says
January 25, 2019 at 3:04 pmNEVER 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.
Travis Hornsby says
January 25, 2019 at 10:19 pmCall their ombudsman line. That might help. Number starts with 717 listed on this post: https://www.studentloanplanner.com/fedloan-servicing-cost-us/
Adia says
February 17, 2019 at 1:10 amWhen 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
Travis Hornsby says
February 18, 2019 at 2:07 pmI 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.
Robert says
February 20, 2019 at 7:33 pmI 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.
Travis Hornsby says
February 20, 2019 at 8:53 pmSorry to hear that Robert. You need to contact the FedLoan ombudsman line. (717) 720-7605
Moniet says
February 23, 2019 at 12:28 amThese 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!
Travis Hornsby says
February 23, 2019 at 9:46 amSorry 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
Anne H. says
March 9, 2019 at 2:48 pmWhy 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.
Travis Hornsby says
March 11, 2019 at 9:18 amBecause 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.
Marquis says
March 18, 2019 at 1:11 pmNot 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
Travis Hornsby says
March 18, 2019 at 6:41 pmIt 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
Robert says
March 20, 2019 at 5:46 amMarquis
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
Leticia says
March 29, 2019 at 12:50 amSo 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.
Travis Hornsby says
March 29, 2019 at 10:42 amWell then fedloan is your only option because you want to use PAYE or REPAYE to pay 0 Leticia.
Leo Mikhaylov says
April 24, 2019 at 10:57 amHow is it legal for FedLoan to take payments from me since 2017 and the principal balance only going down less then $100?
Travis Hornsby says
April 24, 2019 at 4:41 pmPayments 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
Lev says
April 24, 2019 at 11:11 pmHow 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.
Travis Hornsby says
April 25, 2019 at 6:23 amStudent 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
Hunter says
October 22, 2019 at 4:38 pmIn 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.
McGee says
April 29, 2019 at 10:16 pmToday 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.
Travis Hornsby says
April 30, 2019 at 1:21 pmWow “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
Seth Nedom says
May 3, 2019 at 8:49 amI’ve been told to contact a student loan officer: jay@moneywiselaw.com.
Good Luck. They are idiots at FedLoan.
Travis Hornsby says
May 3, 2019 at 10:57 amWell 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.
Nicholle says
May 1, 2019 at 11:10 amI 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?
Travis Hornsby says
May 1, 2019 at 4:54 pmWow not sure I’d reach out to a student loan lawyer. jay@moneywiselaw.com is one you could try
Seth Nedom says
May 3, 2019 at 8:43 amTravis – thank you very much. I’ve been pulling my hair out for months. I’ll give the attorney a call.
Catherine says
July 12, 2019 at 8:38 amI’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.
Travis Hornsby says
July 16, 2019 at 3:15 pmOnly way that changes is if Congress had a big enough earful that they didnt renew the contract
Kissmyass says
July 15, 2019 at 4:34 pmI hate this fucking company!!!
Kathy says
August 15, 2019 at 1:14 pmI 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
Doug says
August 27, 2019 at 5:16 pmFedloan 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.