Lana Oconnell
As of December 2022, FedLoan Servicing, the company that collected and tracked federal student loan payments, is no longer active. Its government contract expired, and all loans in the FedLoan portfolio have been transferred to other servicers. If you were previously a FedLoan borrower, your loan has been transferred to one of the following companies: MOHELA, Edfinancial, Aidvantage (formerly Navient), or Nelnet. You should have received a notification from your new servicer when the transfer happened, including details about how to access your account and sign up for online payments. You can also pay a third-party company for assistance or hire a CFA to guide you with your student loans.
| Characteristics | Values |
|---|---|
| Contract Expiration Date | December 2022 |
| New Servicing Companies | MOHELA, Edfinancial, Aidvantage (formerly Navient), Nelnet |
| Account Access | MyFedLoan Login Account |
| Federal Student Loan Types | Direct loans, Federal loans for family education |
| Payment Plans | Income-driven, standard, graduated, income-sensitive |
| Customer Service | Payment processing, invoice delivery, problem-solving |
| Loan Forgiveness | Teacher Loan Forgiveness Benefits, Public Service Loan Forgiveness |
| Additional Services | Free credit score, reimbursement system, student loan planner |
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What You'll Learn
FedLoan Servicing contract expired in December 2022
The FedLoan Servicing contract expired in December 2022, and all loans in the FedLoan portfolio have been transferred to other servicers. If your student loans were previously managed by FedLoan Servicing, you should have been notified of your new servicer, including details about how to access your account and sign up for online payments, autopay, and email-only notifications.
FedLoan Servicing borrowers were transferred to one of the following companies: MOHELA, Edfinancial, Aidvantage (formerly Navient), or Nelnet. MOHELA uses the COMPASS system, which was developed by FedLoan's parent company, the Pennsylvania Higher Education Assistance Agency (PHEAA). PHEAA also uses PHEAA subsidiary AES as a backup servicer, so it made sense for MOHELA to take over the management of the PSLF program from FedLoan Servicing.
The terms and conditions of your loan, as well as available loan forgiveness programs and repayment plans, will remain unchanged. Additionally, the interest rates on your loans will not change after the transition. However, you may experience temporary disruptions as you adapt to new systems and procedures.
If you are unsure which company is your new servicer, log in to your My Federal Student Aid account and scroll down to the "My Loan Servicers" section on your dashboard. You can also get in touch with any of the loan servicer contact centers by calling 1-800-4-FED-AID.
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Loans transferred to MOHELA, Edfinancial, Aidvantage, or Nelnet
As of December 14, 2022, all FedLoan borrowers were transferred to one of the following servicing companies: MOHELA, Edfinancial, Aidvantage (formerly Navient), or Nelnet. If FedLoan Servicing previously managed your student loans, you should have received a notification from your new servicer when the transfer happened, including details about how to access your account via its servicing portal and sign up for online payments, autopay, and email-only notifications. Even if you had these features set up with FedLoan, you'll have to start them up again with your new servicer.
All servicers deliver the same options and programs, but customer service may differ from one to another. If you’re unsure which company is your new servicer, log in to your My Federal Student Aid account and scroll down to the “My Loan Servicers” section on your dashboard. You can also get in touch with any of the loan servicer contact centers by calling 1-800-4-FED-AID.
While there are no clear pros and cons to choosing one servicer over another, some borrowers have complained about Nelnet, while Edfinancial has been described as slower and overwhelmed, with long customer service wait times. However, Edfinancial has also been praised for its helpful customer service, ease of use, and phone representatives who are "pretty helpful with any questions."
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MyFedLoan: Direct and Federal loans for family education
MyFedLoan is a student loan company that was commissioned by the Education Department to manage their FedLoan Servicing Account. It is one of the biggest student loan service companies and handles all public services.
In MyFedLoan, federal student loans have two most common forms: Direct Loans and Federal Loans for family education. Both types of loans are eligible for one or more payment plans related to income. Once logged in to your FedLoan Servicing account, you can see what type of federal student loan you have, the interest rate on those loans, the repayment amount, and more. Each of these plans aims to link your monthly payment with your income and the size of your family, offering an affordable payment option during the life of the loan. There are also standard, graduated, and income-sensitive repayment plans.
FedLoan Servicing also gives you the opportunity to qualify for loan forgiveness, such as Teacher Loan Forgiveness Benefits. You can also control the discharging or cancellation of your loan and get your free credit score. If you need help with your payments, you can contact your service provider to find out what options are available. You can also pay a third-party company for assistance, such as a CFA, to guide you with your student loans.
As of December 14, 2022, FedLoan Servicing's government contract expired, and all loans in the FedLoan portfolio have been transferred to other servicers: MOHELA, Edfinancial, Aidvantage (formerly Navient), or Nelnet. If FedLoan Servicing previously managed your student loans, you should have received a notification from your new servicer with details about how to access your account and sign up for online payments, autopay, and email-only notifications.
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Repayment plans: standard, graduated, income-sensitive, and income-driven
Standard Repayment Plan
Borrowers are automatically assigned this repayment plan once they enter repayment unless a different plan is requested. The standard repayment plan establishes a schedule of equal payments over a 10-year repayment term. During this time, borrowers are required to pay their federal loan(s), including interest, and make at least a $50 minimum monthly payment.
Graduated Repayment Plan
Graduated repayment allows borrowers to begin repaying their loan(s) at a lower payment amount than normal. Every two years, the payment amount will increase until the balance of the loan is repaid within the maximum repayment term applicable to the loan. The maximum repayment term for unconsolidated loans is 10 years, and up to 30 years for consolidated loans. You will pay more over the life of your loan than on the 10-year Standard Repayment plan.
Extended Graduated Repayment Plan
The extended graduated repayment plan is suitable for borrowers with a lot of debt. It is for those whose financial situation does not allow for other repayment plans, but they expect to be able to pay more in the future. The monthly payments are generally lower and increase later in repayment. The maximum repayment term is up to 25 years. To qualify, you must have more than $30,000 in outstanding Direct Loans or FFEL Program Loans.
Income-Driven Repayment Plans
The monthly payment amount is adjusted annually to reflect changes in income, based on the borrower’s total monthly income and total student loan debt. This option may be used for a maximum of five years, after which the borrower’s account(s) will convert to graduated or standard payments. Under this option, the borrower is required to provide documentation of income on an annual basis. If documentation of income is not provided each year, the loan(s) will be placed on a standard repayment schedule.
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Loan forgiveness: Teacher Loan Forgiveness Benefits
FedLoan Servicing was a company that collected and tracked federal student loan payments. Its contract expired in December 2022, and all loans in the FedLoan portfolio have been transferred to other servicers: MOHELA, Edfinancial, Aidvantage (formerly Navient), or Nelnet. If FedLoan Servicing previously managed your student loans, you should have received a notification from your new servicer when the transfer happened, including details about how to access your account and manage payments.
Now, here's information on Teacher Loan Forgiveness Benefits:
The Teacher Loan Forgiveness Program (TLF) forgives up to $17,500 of your Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford Loans. This is after five complete and consecutive years of teaching at a qualifying school. To qualify, you must have been employed as a full-time teacher at an eligible school for five complete and consecutive academic years. At least one of those years must have been after the 1997–98 academic year, and you must have been a new borrower on or after October 1, 1998. Certain highly qualified special education and secondary mathematics or science teachers can qualify for up to $17,500 in forgiveness. Other eligible teachers can qualify for up to $5,000. Direct PLUS Loans, FFEL PLUS Loans, and Perkins Loans aren’t eligible for forgiveness through TLF.
Perkins Loan cancellation for teachers can only forgive your Federal Perkins Loans. If you’re eligible, up to 100% of your loan(s) may be canceled in the following increments: 15% canceled per year for the first and second years of service, including accrued interest. Unlike other forgiveness programs, Perkins Loan cancellation forgives portions of your loans in yearly increments after you meet service requirements. To find out if a school is classified as a low-income school, check the online database for the year(s) you’ve been employed as a teacher. Even if you don’t teach at a low-income school, you may qualify if you teach mathematics, science, foreign languages, bilingual education, or special education.
You may qualify for more than one federal forgiveness program, but your decision to take advantage of one program may impact your ability to take advantage of another. For example, if you make payments on your loans during your five years of qualifying employment for TLF and then receive loan forgiveness, those payments won't count toward PSLF. However, some people could benefit from both PSLF and TLF. For instance, you could receive TLF after 5 years and PSLF after 15 years. This situation is ideal for borrowers with a higher loan balance and lower annual gross income.
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Frequently asked questions
FedLoan Servicing is a student loan company commissioned by the Education Department to manage their FedLoan Servicing Account.
Before paying off your student loans, you must understand your payment terms. You can pay off your student loans using MyFedLoan. You can also pay a third-party company for assistance.
You can easily log in to your MyFedLoan account to directly access the FedLoan Servicing Portal. Once logged in, you can see what type of federal student loan you have, the interest rate on those loans, the repayment amount, etc.
Direct loans and Federal loans for family education are eligible for one or more payment plans related to income.
