Complete Review of MyFedLoan Servicing Relief Options

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My Review of MyFedLoan Servicing

So you’re all pumped up after graduating—your parents give you a bouquet of roses, your friends are cheering you on, you look awesome in your cap and gown—what could possibly go wrong? Well, you look forward to your job search, but sooner or later, your thoughts would have to drift towards your student loans and a company called MyFedLoan. 

And if you are anywhere near like the typical American college graduate, you definitely have a lot to think about. Not only should you think about the bank officer servicing your loan, you probably are going to be wracking your brains on how to keep several steps ahead of the interest rate that’s inflating the amount of money you have to pay for your loan.

It is no surprise that a lot of college graduates are still struggling with their loan payments 10 or even 15 years after graduation. Talk about killing that graduation buzz.

Well, the good news here is that you only need to find the right servicer company for your federal loan. A servicer company is a company organized to manage your loan repayment. Please understand that this is not a simple decision. You are going to have to work with that company for at least ten years on average.

Like I said, some students are stuck with their private and federal educational loans for ten to fifteen years or more. This is why it’s really important to find the right service company for your federal loan.

Now, educational loan packages have two parts, federal and private. If your education was funded with federal funds, your package might be serviced by FedLoan Servicing. If this company is your loan service provider, you would have to use their online loan management platform called MyFedLoan. Here’s a quick review of this platform so you can benefit from all its features. I’m also going to give you some tips on how to deal with any issues that may arise with this company.

Student Loans Serviced by MyFedLoan

A non-profit establishment, FedLoan Servicing is operated by the Pennsylvania Higher Education Assistance Agency (PHEAA). Don’t let the name fool you, however. While PHEAA seems like they handle only Pennsylvania loans, they actually take on loans from all across the United States.

Based on federal guidelines, there are only nine companies that act as loan servicers of federal educational loans. Unfortunately, you can’t pick which of these nine companies will handle your loan. Additionally, you cannot jump from one organization to another. Instead, the US government automatically assigns a federal loan service organization to handle your particular package the moment you take out these student loans. 

In the year 2012, the federal department of education chose MyFedLoan as a loan service organization to handle federal educational loans as part of….

The Obama Student Loan Forgiveness Programs. Now depending on the type of laon is what gives each borrower different options;

Your loan might be assigned to them if you have at least one of these types of educational loans:

  • Directly subsidized loans

These loans are for both graduate and undergraduate students. These are awarded based on financial need.

  • Direct loans which are unsubsidized

Being un-subsidized, these educational loans for both graduate and undergraduate students do not require applicants to prove they have financial needs.

  • Direct plus

These loans are intended for parents of students or graduate students.

  • Loans for direct consolidation

These loans are made out to students who have taken out federal loans and then consolidated them.

What it’s like to use FedLoan Servicing’s platform for loan management:

If FedLoan servicing handles your federal loans, you will have access to this organization’s online platform, MyFedLoan. This platform enables you to easily make payments, track your progress as you pay down your loan, get important information on how your loan can be forgiven, as well as get access to downloadable forms that may help you get valuable tax deductions on your paid student loan interest.

This platform is very easy to access with a web browser. If you’d rather use it through your mobile phone or tablet, you can download FedLoan Servicing’s app for your iOS or Android phone.

Whether you’re using the app or the service’s regular website, you must first fill out a form to get your account started. Click on the link “sign in” located at the upper right portion of the page. Click “create account now.”

You will be asked to input the following information: your full name, your email address, date you were born, as well as the number of your social security card. It will also ask you to supply the user name you would like and, of course, your password. For additional security, you will be asked to supply the answers to certain verification questions intended to determine your identity.

Once your account is set up and working, you can access this platform to check out the balance of your loans, find out when your next payment is due, as well as get the latest information on your loan’s applicable interest rates.

In addition to getting the inside scoop on your loans, the MyFedLoan platform also features many additional useful tools. You get access to an educational section that steps you through the process of learning the basics of student loans.

This section lays out an overview of the options available to you regarding loan repayment. It also tells you what would happen if you miss out on payments or you’re late in making your payments. Finally, you get some information on special repayment or low interest programs for active duty members of the military as well as for teachers.

Repayment Options Available on MyFedLoanmyfedloan breakthrough

There are several options to pay through FedLoan Servicing:

  • Direct debit

Using this option, you link your personal savings or checking account to your FedLoan account. At a set time, the company automatically debits your loan payment amount from your account.

It does this the exact same day, every single month. You don’t have to worry about manually making payments. This happens automatically.

If you select this option, you can sign up for interest rate deduction of 0.25%.

  • Mobile App

Instead of accessing the platform through a browser, use the MyFedLoan app to arrange payments as well as make extra loan payments.

If you don’t want to make direct payments via debit, you might want to access the MyFedLoan website manually and make a one-time remittance. Please note that if you want to pay again manually, you have to make sure you pay on or before the deadline. You have to do this manually. This can be quite stressful.

FedLoan Servicing makes available to borrowers an automated telephone number that they can access to pay off their loans. You only need to call 1-800-6992908, input the account number for your loan, and supply the routing number for your bank account.

  • Snail mail

If you’d like to pay via traditional mail by using a money order or check, you can definitely do this by mailing: US Department of Education, FedLoan Servicing, PO Box 530210, Atlanta, GA 30353-0210.

Make sure that in your included money order or check, you write your loan account number. That way, your payment will be credited to the right account.

What if you run into problems repaying your loans?

In this situation, FedLoan Servicing might assist you with any of the following loan repayment options

Alternative payment plans

If you’re having a tough time covering the full payment amount that’s due, you can choose to pay only a part of it. Contact FedLoan and ask if you can apply for an IDR Program.

IDR stands for income-driven repayment. Under this plan, the Department of Education will limit your payments to a certain percentage of whatever discretionary income you have left at the end of the month. This, of course, means that the repayment term of the federal portion of your loan package is extended.

Depending on just how little money you’re making every month, your monthly loan repayment can be set at a much lower rate. This means that you’re going to have to pay a lot more interest over a longer period of time.

But if you need to reduce your monthly payments, the IDR plan might be able to help you quite a bit since it can definitely provide near instant relief………

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You can access details on IDR payment plans through the MyFedLoan platform. You can even use its alternative repayment calculator. This gives you a monthly estimate of the payments you’re expected to send under different IDR scenarios.

By choosing among these different options as well as which, of course, brings different timelines, you can make an informed choice as to how you make your loan repayments more manageable.

  1. You can ask for a deferment

If you simply can’t afford to payment on your loan, you might want to try to qualify for a deferment. A loan deferment enables you to postpone payments for up to three years or 36 months. If your loans are subsidized by the government, the government itself will cover whatever interest is accrued while the loan is “frozen” by the deferment period.

To take advantage of this, go to your MyFedLoan account and find the section entitled “manage repayment.” You will have to fill out a form to see if you meet certain federal requirements to be eligible for this program. If you pass that quiz, you will then be able to apply for this deferment online.

  1. Forbearance

These are quite similar to loan deferments. They enable you to postpone your loan payments for quite some time. The big difference is that forbearance only enables you to stop payments for a maximum of one year, compared to 36 months with deferment.

It doesn’t matter what type of loan you have, you will have to pay that interest.

You’re not paying the principal off, but you’re going to be paying the interest that piles up over the 12 months your loan payments are frozen. These will be calculated and added on to your payments once they resume.

  1. Forgiveness of Student loans

The great thing about FedLoan Servicing is that they are the only federal loan servicer entity that manages these types of applications. Indeed, even if your loan is being serviced by another loan servicing company, the Department of Education will assign your debt for servicing by FedLoan. DOE will only do this if you’ve proven that you are eligible for public service loan forgiveness.

Use the MyFedLoan platform to get the forms that you need to fill out. This includes the employer certification form. You have to submit this so you can apply for public service loan forgiveness. The FedLoan Servicing checks out these forms to make sure you are actually eligible for PSLF.

  1. Ask for a discharge

In certain special and relatively rare cases, you might actually qualify for the legal discharge of any and all educational loans. Don’t get excited, though. These situations are very extreme and relatively rare. For example, your loan package might get discharged and you don’t have to pay for it if you have become fully and permanently disabled. This means that you’re unable to get employment. You just simply cannot work.

In this situation, you need to fill out a form made available through the MyFedLoan portal, outlining total and permanent disability discharge requirements

Reviews of MyFedLoan

There are many reviews of this company available online. They raise many different issues, but one common problem that they keep mentioning is lack of flexibility.

The Department of Education assigns you to one of nine federal loan servicing companies. You don’t have a choice in the matter. If you’re not fully satisfied with the service you’re getting, tough luck. You can’t switch companies.

A lot of people with FedLoan Servicing are not very happy with this situation. To make matters worse, this company is not registered with the Better Business Bureau (BBB). On the BBB’s official website, there are quite a number of reviews of FedLoan Servicing, and many of these are quite critical.

In fact, if you check out BBB comments on MyFedLoan and its servicing of federal loan packages, around 97% of the comments on the Better Business Bureau website are negative. Most of these negative reviews focus on how the company handles payment processing.

Some people also complain that their applications for public service loan forgiveness are either ignored or delayed. Indeed, there are so many complaints against this company that it is embroiled in a current lawsuit.

As reported by The New York Times, the Commonwealth of Massachusetts Attorney General filed a complaint against FedLoan Servicing’s parent organization PHEAA. According to this suit, the Attorney General claims that the company made errors managing the PSLF program as well as increasing borrowers’ costs for repayment.

Asked for their side of their story, a representative from PHEAA simply said that their organization disputes whatever allegations are raised in the suit. This lawsuit is still ongoing. It will probably take several years to be fully resolved in the courts.

If you have any issues with this company, you can get in touch with the Consumer Financial Protection Bureau. Let them know about your concerns or complaints should you experience any problems with this service provider.

How to Pick a New Service Provider

While you cannot switch out service companies for the federal loan component of your loan package, you can refinance your educational loans with a private company.

When you refinance, you get a brand new loan issued by a financial institution or bank. You take this loan and use it to completely repay your existing loan package. This way, you can get out from under federal loan service companies like FedLoan Servicing. This new loan will be handled by a completely different and separate company.

The best part is that you would have more choices when shopping for a refinance company over the minimum payment you have to make every month, the interest rate for the total loan, and alternative payment terms. You get a lot more control over your loan package.

Indeed, refinancing can help you save quite a bit of money over time or significantly reduce the amount of cash you have to pay every single month.

Now, please understand that if you decide to go with a “Private Lender”, you let go of any benefits you get with federal loans.

  • You don’t get income dependent repayment perks.
  • You also will be ineligible for loan forgiveness. 

This is why it’s really important to balance whatever benefits you’re getting from private refinancing of your federal and private educational loans and the risks involved.

Getting a Firm Handle on Your Educational Debt

Let’s face it, managing your educational loans can be very stressful. The good news is, by simply understanding what payment options are available and who your loan service company is, you may be able to come up with options that would make the loan repayment journey much easier. If you need help applying or enrolling into different federal loan forgiveness programs, give us a call, we are here to help! 

We know that alot of times, when dealing directly with your loan servicer (FedLoan), It may feel like they dont have your best interest in mind. That’s where you want to reach out to a loan expert and get a clear understating of your given situation. Fill out form below to speak directly to an expert and determine your eligibility, or just answer those hard to ask questions for you!

Getting Started

If you are using the MyFedLoan online platform, take a long hard look at the information they have made available as well as their resources so you can get a better grip on your student loans. Also, be aware of the issues that the company is dealing with. Check your account and see if there are any other options available to you that would enable you to manage your student loans better.