If you take out a student loan and there is a federal loan component in your overall financial assistance package, the US government doesn’t actually hang on to your obligation for the complete life of the loan. Instead, the federal government, namely the US Department of Education, will sell these loans to private servicing companies.
These companies will facilitate and manage these loans as borrowers pay them off. One of the organizations the DOE assigns federal educational packages to is a company called FedLoan Servicing. Check your loan package or student loan statement that you get in the mail. If you have student loans serviced by FedLoan Servicing, you should pay attention to the following information as it could possibly save you money.
What Educational Loans are Handled by FedLoan Servicing?
The US Department of Education has only selected 9 student loan servicing companies to handle all federal student loan debt. It doesn’t sell its loans to any other organization’s except these 9.
One of these is named FedLoan Servicing. This company handles the management and administration of educational loans and their repayment. They do this on behalf of borrowers, as they are approved by the Department of Education to do so. This company was actually founded by the Pennsylvania Higher Education Assistance Agency or PHEAA to specifically handle student loans originally offered by the federal government. FedLoan Servicing also happens to be one of the biggest loan servicing organizations in all of the United States. Currently its educational loan portfolio totals close to $303 billion dollars.
How to Repay Educational Loans via FedLoan Servicing
If you have an educational loan that is directly serviced by or was sold to FedLoan servicing, this organization will be your primary contact for repaying, as well as managing your federal student loan debt. This company will send you statements every month, reflecting your monthly payments due so that you can send in your payments. You can also take care of your financial obligation through snail mail or through their online portal by creating a log-in.
- If you’d like to handle your payment obligations by old fashioned mail, then you can simply send your personal checks to the address:
- Department of Education, FedLoan Servicing, PO Box 530210, Atlanta, GA 30353.
However, make sure that FedLoan Servicing is the payee of your check so that there is no confusion down the road.
- To pay electronically, just go to their online portal and create an account directly through FedLoan Servicing. Once this account is set up, you can link your savings or checking account to their system.
Once it’s all set up and running, you can either set up monthly direct transfers from your bank account to your loan account or you can manually make payments on a one-time basis. It’s your choice.
Tips to repay your Federal Student Loan debt quickly
If you want to speed up the rate in which you pay down your total student debt with FedLoan, try the following options:
Sign up for direct debit
- This payment option automatically takes your monthly payment due out of your personal bank account. Helping you maximize your peace of mind by just setting it and forgetting it.
Every single month, like clockwork, payment will be taken from your account and transferred to pay down your educational loan. On top of this quick, safe and painless payment procedure, you also get a nice reduction of 0.25% interest on your student loan. Not too shabby.
Unfortunately, you might experience problems if your bank’s electronic payment system doesn’t work properly. If, for some reason payment is not transferred automatically, FedLoan might hit you with a late payment fee or your loan might even be considered delinquent. This would mean having to pay a penalty as well. Make sure to check with your bank to ensure that the transfers are made regularly and smoothly.
Pay in advance
- Using this option, when you make a payment, you can pay a lot more than the minimum amount you’re obligated to pay on a monthly basis. This will also readjust the payment amount due for your following bill.
FedLoan recommends that you keep paying the minimum amount due that was originally set for your account. Don’t just pay the reduced bill being sent to you though because if you do, you will no longer be in “paid ahead” status. You will go back to normal. If you want to establish a payment cushion, you have to remain in this “paid ahead” status.
Start paying interest before graduating
Believe it or not, when you’re still going to school, you can start paying interest on your unsubsidized loans. This means that you stand a chance of lowering the interest that starts to accrue on your loan by the time you’re supposed to repay. Helping you ensure that you lock in at a lower rate. You will be amazed at how much quicker you’re able to pay off your total student loan amount by following these simple tips!
Select a payment plan that gives you a lower, more affordable payment
Many students are given the 10-year standard plan for repayment. For most students, this is normally affordable, however, your financial situation may be different. Your best choice might involve income driven repayment plans; like a income driven repayment (IDR), income contingent repayment (ICR), income-based repayment (IBR), pay as you earn or revised pay as you earn (REPAYE) plan.
These program end up giving you a new monthly payment based strictly off of your income and household size, rather than interest and amount owed. Thus resulting in a lower payment that is comfortable and easy to afford. The kicker here is that your new payment is given a maximum term, meaning once you meet that term, any remaining balance could be forgiven.
Remember, you can always reach out to your servicer directly to apply/enroll.
However, If you would like private help in determining your eligibility, you can speak directly with an intake specialist by completing the form below.
How to Deal with FedLoan Servicing
If you’re having a rough time making your monthly payments on time, don’t give up hope as there are several options available to you. For example FedLoan Servicing can offer you certain repayment options that can help ease your financial pain.
You may need just one-time help because you missed a recent payment due to extraordinary personal issues, or you might be in need of longer term assistance, like reducing the overall monthly student loan repayment amount, either way, FedLoan is very versatile and flexible in ways to help.
Here are just 3 of the most common ways they can help you out:
Modifying the due date for your payments
This loan servicing company actively recommends that you select a payment due date that is in line with your personal financial situation. Maybe you want to set up a due date that lines up with your payday date? Maybe even pick out a date that you know there will be enough money in your bank account every month? Whatever the case may be, FedLoan is definitely flexible in terms of payment date setting.
Select a revised payment plan
If you want to change the overall repayment terms for your loan, MyFedLoan has a repayment calculator that can help estimate what your new monthly payment would be if you decided to change it. To access this, go to its online platform and click “repayment schedule estimator.” This is located in the section called “view your options.” Which surprisingly enough is located in a page labeled “delinquency and default.”
You have to supply some information yourself, like for example, the current interest rate on your loan, the total loan amount, how many months you have been paying, how many dependents you have, what your annual expected income is, and your geographic location. You will also need to indicate whether you’re married, head of household or single The calculator will then tell you which of the plans make the most sense based on your particular financial situation.
Need help deciding what option is best? Just complete the form below to speak directly to an independent counselor who can help guide you.
Suspending or holding payments
- Depending on your particular hardship or personal money problems, you may be able to qualify for federal forbearance or an deferment.
Now, a lot of people think that this is one and the same. Which is wrong. First of all, they only apply to the federal portion of your loans. Going into a deferment temporarily stops your obligation to pay, but this only applies to the subsidized portion of your loan debt. In other words, if you took out student loans that were subsidized by the federal government, only those loans covered by federal subsidies will qualify for complete stoppage of payment. For the unsubsidized loans, your interest will unfortunately continue to pile up.
You can cover this by paying for them every single month your loan is in deferment or you can roll them up into a larger sum and pack it into your remaining balance, which you will handle once the deferment period is over. If you choose to ask for a forbearance, you can stop making payments or pause the payments for up to a year. But regardless of the type of loan you take out, interest will continue to pile up on you.
You should definitely get in touch with FedLoan Servicing to go over your available student loan repayment options as well as to walk through your overall options. A lot times a deferment might look like the best solution, but you may be overlooking a serious detail that could make a forbearance the more attractive choice.
How to Contact FedLoan Servicing
If your educational student loan is being serviced by FedLoan Servicing, you can get a hold of a representative any time Monday and Friday, between 8:00 AM to 9:00 PM EST. You can even reach them through their toll-free number, 800-699-2908.
- If you need to send in physical paperwork, FedLoan Servicing is located at FedLoan Servicing, PO Box 69184, Harrisburg, PA 17106.
- To dispute any credit related issues or if you have to turn in specific forms, send them to FedLoan Servicing Credit, PO Box 60610, Harrisburg, PA 17106.
- Other ways to get a hold of the company include Twitter, email, or its official website.
Please understand that if your loan was sold to this company and is currently being serviced by them, it is your responsibility to be aware of how their system works. Make sure that you fully understand your responsibilities and rights as a borrower so as to responsibly handle your educational loans and their repayment over the course of your loan term