FedLoan Servicing is Terrible

If your student loans happen to get bought by FedLoan Servicing I have one word of advice for you: run! Run far, far away! But you probably have the same stories about your loan servicing company, so is there anywhere you can actually run to? It has been nothing but headaches since I first found my loans were being bought by them from Direct Loans.

The first thing that happened was that I logged into my Direct Loans account and realized that I suddenly had all my loan balances at zero. At first I thought I might have been the lucky winner of a computer glitch or some kind soul had decided to pay all my loans in full. After about 30 seconds, I remembered reading about this several times before. I knew my loans had been sold to another provider. The question was, who?

The next day I received a letter in the mail learning that my new provider would be FedLoan Servicing. Seemed like a pretty standard name and company, and what was the big deal? That was the last time I would think that about them. I signed up for an account with them using my Social Security number and other information, but for some reason I had no loans in my account and my payment was supposed to be due in a few days.

I filled out the contact us form asking about my accrued interest as well as my loans not showing up and when I would have to make a payment. I received a generic response that it could take up to 15 (!!) business days to process the transfer of my loans and that I wouldn’t have to make a payment until 7/21 instead of my 6/21 payment. They dodged the interest part of my question, but that was whatever at that point.

So then the time came for my 7/21 payment, and I realized that interest HAD been accruing the whole time. Two of my loan balances are actually higher than the started out. That is partially my fault from the time with Direct Loans, but I had corrected that by paying extra the next time. But now they had gone right back up to where they were before and then some.

I decided to make a $600 payment on my minimum payment of $343. I figured that should clear all the extra interest no problem and reduce the principal a little bit in each loan. I would start from a “clean slate” since I was making great progress with my private loans and this just didn’t seem worth the headache to deal with.

Fast forward to a few days ago where I decided to just review my payment, as that took a few business days to process itself. When I looked at the results I was absolutely stunned and I could feel my blood pressure rising instantly! It seems that they had largely decided to arbitrarily put my payments however they felt it – there was no weight based on the size of the loan, and they ignored the accrued interest. The payments weren’t even spread out evenly!

(Note: I’m totally a dude, but this picture perfectly sums up my feelings right now)


A direct quote from their website is: “Any interest or fees that have accrued on your loans will be paid first before reducing your principal balance” but apparently this only applies when this is in their interests, like when the other loan has a lower interest rate. They would rather let the higher interest rate keep accruing interest and not even touch the principal.

Here is an example from part of my payment last month:

Loan 1: Balance: $3,322.53

Here is the last payment I made on this loan:

Loan Type Principal Paid Interest Paid Late Fee
DIRECT SUB STAFFORD LOAN $31.61 $50.91 $0.00

Loan 2: Balance: $4,312.47

Here is the last payment I made on this loan:

Loan Type Principal Paid Interest Paid Late Fee
DIRECT SUB STAFFORD LOAN $0.00 $48.24 $0.00

As you can see, the second loan balance is actually higher than the first, yet nothing reached the principal. I have even smaller loan that they decided to put $120 total towards and another loan that had $0 principal paid as well as the one above. Both of those loans still had unpaid interest, yet here their system was putting $31 towards the principal on this loan and $70 on another and then paying just a portion of the interest on another loan. This is not how they say their payment system is supposed to work!

I have submitted two requests through the contact us form, but I will absolutely be amazed if I receive anything more than a generic response. The form says that they will respond within 2 business days, and tomorrow will be around 3 so I should probably get a response by tomorrow. Β It seems like I’m going to have to waste time on them with the phone and probably get told they can’t fix payments that have already happened. I apologize if this entire post sounds too rant-y in advance, but I don’t like these shady business practices that FedLoan Servicing is pulling on me here.

Has anyone else had similar experiences with FedLoan Servicing or even any other student loan servicer?

Photo credit: Don Hankins / Foter / CC BY
Photo credit: Evil Erin / Foter / CC BY


  1. My consolidated loan was just transferred to Fedloan. I’m not liking the stories already. I didn’t even realize my loans had been transferred because I used Direct Debit until Fedloan sent me an overdue notice for my first month with them. I logged onto their site and had to reapply for direct debit, which means I lost my 0.25% rate decrease. Before I can use their program, however, I have to pay to mail them an unsecured letter with all my banking information and my signature. Then processing will take 2-3 months before direct debit payments can be established. After 6 months of that, my interest rate will be reduced 0.25% again. That means it will take almost a year to get a decrease in my interest rate again, and only if I want to risk sending a letter with all my private information that anyone can open and use. What a scam! I’m so aggravated! How is this progress? I’ve never had a default on my loan until now because of this garbage.

    1. Hey thanks for your comment – I really do hope you have better luck than me. I would highly suggest sending them a letter/e-mail/calling them asking them to remove your paid ahead status permanently if you do not want to deal with that part. DO NOT let them decide how to spread your payments out, manually put the amount you want towards each loan yourself.

      For the direct debit part, so far it hasn’t been worth the headache for me to deal with that for the interest rate which is a shame. I was really excited to see that when my loans first got transferred…and well now you see where I am at!

      I would not worry about a default though, just keep making your regular payments that you would make. Ignore if they say your payment is $0 or less than what you think. Keep paying what you should be paying so they won’t rip you off. Removing the paid ahead status helps this.

      I also recommend that if you are putting extra money into your principal while on direct debit you will need to send a note in with your check that you mail them that it is for the current month only and to apply extra to principal. If not they will just skip the next months payment from what I’ve been reading.

      1. Ok. I have been lied to by them 3 times. I have called them each time (writing down the name of the person I spoke with and their employee ID as well as the date and time in case I need it at a further time). I told them a specific day to take a payment out May 9th (2 days from the date I specificied) and they didn’t take it until the day after I told them to (May 10)! So I called them (both days) and they told me I had an additional .07 cents for interest. I told them it wasn’t my fault they don’t adhere to the dates to take money out – and what good it is to specify a payment date when they don’t even adhere to it? I told them they are the worst company I have ever dealt with and they are a disgrace and I don’t know how they stay in business (pretty much just ripped into them). So I put ANOTHER .50 cents on the payment and called them back and told them to take it out on the 10th. Well the FINALL took the original payment out but not the payment for the accrued interest from when they disregarded the first payment date. I called again on the 10th and told them to take the 07 cents out on that day so I didn’t have another day of interest. I told them if they don’t take it out of my account today and post it all to my account by the end of today (10th) I will call again and report the repayment portion of the business as a scam to the BBB. You pretty much have to call them every time you make a payment and walk them through and hold their hands. They are by far the worst company ever.y advice call them everyone and every day til you see your payment in the correct place (if paying on a specific one do it online not over the phone or via direct debit it won’t work) and ALWAYS ALWAYS keeps records of payments, payoffs, who you speak with (names and employee ID), the date and time you call them – I have learned this the hard way MANY times! Good luck!

  2. This year I decided to pay more than my 155/mo payment. From this 155 payment, around 75 was interest. I bumped my payment to 400/mo and they started taking out 125 in interest, I contacted them and never received a reasonable answer. Seemed like the people I am dealing with do not understand my very simple question.

    1. That sounds really odd, I’ve never experienced something like that. Did you have another loan that you weren’t paying originally that was maybe in deferment and had showed up? Or maybe for some reason your loan had a variable interest rate?

      Technically as you lower your principal balance the amount of interest you are paying should go down over time, definitely not up!

  3. Lets just say I am also having a horrible experience with them. Their customer service team SUCKS big time. The first two times I called, I spoke to two seperate individuals who sounded so lazy when talking and was just rambling. One of them “forgot their train of thought” while rambling on to me on the phone. The other one was just rude. When my call got routed to her there was no proper greetings, just “your name”. She didn’t want to answer any of my questions, so I was routed to the supervisor, which was also not very helpful either. I did receive what I was calling for, but with the INCORRECT information. The third time I called back, I was told that a form will be emailed to me. I received the form that they were supposedly refering to, but turns out it’s NOT the correct form. Called back again, the customer service agent sounded more professional, but told me that they could not email the form it must be mailed. So I said ok and asked to have it expedited. The customer service rep told me that she can’t just snap her fingers to make it happen in a rude way. Again unprofessional and not something you say to customers. Everything became a waiting game. I finally called the 5th time and spoke to someone who was more knowledgable and was able to help me. I was so relieved. This was all for a mortgage and I was almost sure that I would not be able to get everythng in time for closing. Now I’m sure you can imagine how stressful I was. I will supposedly be receiving an email shortly with the information needed. Hopefully everything comes through so that I can finally purchase my first home. It has been a nightmare. WIsh me luck!!

    1. That really sucks, I hope you do have luck going into the future. Needing this documentation for your mortgage I think would make things even worse! Just having the stress of the loans was pretty terrible for me but having it affect a major purchase like that I can understand would make things even worse.

      The one time I did talk with them on the phone, I tried explaining my situation and it basically felt like she was just listening because she had to. I was not ranting and was remaining polite, I just wanted a reasonable answer! I asked if there was someone higher up I could speak to and I just got hung up on. I commend your efforts for calling in not once but FIVE times. I know the other person on the line deals with annoying people all day, and I try to remind myself that but it’s so much easier when you get someone who is actually willing to help.

      The only time that I finally saw results was when I sent a certified letter stating what I needed to them, and about a week after I saw the results. I can’t wait until I never have to deal with them again.

      I do really hope things work out for you though, I’m rooting for you (and everyone else dealing with FedLoan Servicing!)

      1. @Debt Hater, I won’t be shock if you an an agent of Fedloan . The truth of the matter is they are legalized scammers. The company does not conduct business in an ethical and dignified manner. They prey and exploit people. It is a shame that the Government is in cohoot with such legalized criminal enterprises

        1. I’m not sure how I would still be an employee of FedLoan after writing four seperate posts called “FedLoan Servicing is Terrible”

          I just find it highly unlikely that the entire organization and every employee working for them is corrupt and out to get them. If you are nice to the customer service person and treat them with respect (who is probably not making a ton of money either), they are more likely to be willing to help you out.

          I do agree that FedLoan should be more transparent about loan information and be direct, but you also have to be on top of your loan information yourself. There’s a lot of room for improvement at both ends in my opinion. Do I think that it is fair? No I don’t, but sometimes you have to take control of the situation if you want to get things done.

    2. Did they ever actually e-mail you the form? I’m in the exact same situation and it’s been a month and I’ve talked to three people. The third said he expedited it but…yeah…

      1. They never actually sent me a form, I believe it was just a status inside of my account that changed? I just kept telling them to remove the paid ahead status each time I contacted them. I don’t think I personally had to fill anything else, but it may have changed by now.

  4. My advice to you: don’t trust these people. I know I don’t. I’m just one big ball of scorn right now!

    1. I fully agree with you! I always double check everything I do with them now, and if I’m unsure I always submit a request through their online help to get clarification. I’ve also been manually checking the interest, etc every so often too.

  5. Do you want to hear more about the public service loan forgiveness program? No. No I don’t. First of all if I ever managed to get an interview for a government job no one would hire me anyway. Second of all maybe it’s better that way. Throughout this entire ordeal I’ve learned that education is a bureaucracy…or at least paying the bill is.

    They wouldn’t want me as an employee. I’m not a huge fan of government or politics. Dealing with student loans has not given me any faith in the system or our government at all. The first thing I’d do as a government employee is put the loan sharking department of education out of commission for good.

    If the lottery is a tax on people who are bad at math is education a tax on people who aren’t very bright in general? I want to be a dumb American living comfortably. Not an educated one flying by the seat of his pants. I suppose it’s too late for that.

    In any case I think I’m gonna get into the student loan sharking biz. Seems pretty lucrative…you can set whatever interest rate you want and inflate loan amounts at anytime by just transferring loans around all over the place on purpose so people get confused and then just blaming it on a glitch in the system if they find out and call to complain. Obviously the government doesn’t care that students who are going to college and trying to “better themselves” like they’ve been told by their teachers (who are probably in on the conspiracy) are being taken advantage of. It’s all a bunch of lies and deceit.

    1. The Public Service Loan Forgiveness program is tricky, because you have to make 10 years worth of payments (not in a row though) while serving in a job like that. If you leave that job you will have to use a different program or make regular payments, but if you re-enter a public service job you can pick up where you left off.

      Though I do agree with you about the way these companies operate, I think student loans do provide an opportunity for some people that wouldn’t have been able to attend college otherwise. The problem is the amount of debt people are taking out and the degrees they are receiving.

      The problem with pushing college on students right in high school is that most of them are not ready to make a decision with what they want to do with their life, most are not ready. And when you tell them to follow their dreams into an Art Major at $100,000 worth of debt – that is not good!!

      1. Actually the PSLF is a pretty sweet deal. Payments do not have to be consecutive and you do not have to stay at the same job. I work at a non-profit and have already qualified for over a year towards the program. As I plan to work at non-profits for my whole life this is an ideal
        program. As long as you submit your paperwork and are eligible the loans will be forgiven.

        1. Good point. I forgot that you could make 60 payments, get a new job, then go back into public service and start right over again and have those count towards PSLF.

          I’ve corrected myself above, thanks!

        2. Except that you have to be in a qualifying repayment plan for the PSLF, which is income-contingent, so guess what? FedLoan will plan out your repayment plan based on your income for 10 years! Which is the number of payments you have to make to get the remainder forgiven. In other words, no, despite working for a qualified provider, you don’t get any of your balance forgiven, we will be sure to calculate your payments so we can get all of it from you.

          They also used my gross yearly income to base their calculations on, insisting that “nobody” adjusts for taxes taken out, which is garbage. I then pointed out to the incompetent fool on the phone that the job they were using was one I only started in the middle of the year, so I would be earning less than half of the gross. The woman on the phone’s brilliant response, “Oh. Yeah. I guess so. Well there’s nothing we can do about that.”

          This company is the worst. They keep moving the start of my repayment back a month without telling me, while interest keeps accumulating, by adjusting my repayment plans and putting me into a forbearance, which I have never asked for. And their website is useless. I wish I could file a complaint with the DoE to get my loans handled by someone competent!

          1. Hey – you can actually file a complaint with the Student Loan Ombudsman and they do take these things seriously. I would look into it: https://studentaid.ed.gov/repay-loans/disputes/prepare/contact-ombudsman

            I do not believe that FedLoan is allowed to determine the amount you are paying back. I’m guessing you are on the IBR (Income Based Repayment Plan)?

            It is a fixed calculation of 15% of your discretionary income. This is the difference between your Adjusted Gross Income and 150% of the poverty line for your family size and location.

            You can find a calculator to estimate what your payments should be here: https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action

      2. Well I have been teaching since 2000 and making $567 payments each month since before 2006. Each payment has been in full and on time. So I fill out the form to apply for the loan forgness program and my loan is sent tho these people. So I call and check on my status and that is when it all falls apart. Apparently I have been paying on the wrong payment plan this whole time and to even qualify I will need to swap to a $900+ monthly plan and pay another ten years just to hope to qualify. This will be 34% of my monthly paycheck for a decade. Will I ever get rid of this mess!!

        1. What payment plan were you on before, and do you know what payment plan you have to switch to now?

          You should still qualify for public student loan forgiveness even if you were on income based repayment or pay as you earn. I believe that is even encouraged as a solution.

          1. I believe that I am on the 25 year payment plan. So none of the past 9 years of payments don’t count. So they want me to swap over to the income based payments and start over with 120 qualifying payments. I put my information into the payment calculator and to my suprize with “new plan” I get to make 121 payments. How does this help out the educators? I have seen pay cuts since 2008 an increase in the # of students to teach each year and now this. Does it really make a difference! If you can pay on this for a decade and work in public education shouldn’t that be enough. I currently pay $568 a month and now they want to increase it to $900+ a month. I don’t understand how you could not give me some credit for all these years I have paid even if it was a 2 for 1 exchange. It is just so frustrating. At least maybe it can be forgiven when I kick the bucket.

          2. That’s extremely annoying. I would suggest putting in an inquiry to the student loan ombudsman if you can. Maybe they can get this all sorted out for you.

    2. I don’t call them the Education Mafia because I admire them, I call them that because they are as bad as the Mob.

  6. From day one, I have had nothing but problems with these people. First off like stated above they don’t disburse the payments evenly. So even though I was on autodraft I had to log in and add payments to the loans I wanted to pay more on.

    Second, they took off my autodraft without telling me and then started emailing me to tell me my payments were late. That quickly resulted in me saying you can either fix this and retro date the interest or you can speak to my lawyer.

    Third, and this is probably the best one. I have never been more angry in my life. Last May(2013) I paid my final payments on a 18k loan and 5k loan. It felt good to pay off 23k in loans. After I paid them off I got the letter stating that both loans had been closed out and no money was owed. Then two months later I get another letter stating I still owed money on both those loans and that they had been re-opened and interest had accumulated on the balance. It ended up taking me three months to get them to close out the loans and admit that they were wrong.

    But wait it gets better, today almost a year later I ran my credit to apply for a mortgage and FedLoan is still reporting that I have the loans open that I paid off back in May and that I owe interest on them. This company is a scam artist, everything they do is borderline illegal.

    I would rather slam my head in a car door all day than have to call these people again.

    1. The not disbursing the payments evenly thing is the most frustrating. When I tried telling them over the phone that it seemed a little fishy, and didn’t seem right – that is when they started to get sarcastic with me.

      That is terrible that those loans were determined to be paid off and then they decided to accrue interest on the balance and keep them open. What was the balance anyways, they probably slowed your payment down by 2-3 and started charging interest on a few dollars? Dumb.

      I fully agree with having to call them ever again!! I use the internet submission form or just mail in a certified letter. At least I can do that on my own time and if they give me stupid answers I can just re-submit and get someone new. Calling them on the phone is just a waste of time.

      1. They opened both loans back up for a total of $38, complete waste of my time to even fight it. But I had to since it was toying with my credit. The best part was they took the loans off auto draft to, so that the interest rate went back up.

        They did all of this and didn’t tell me for two months and then sent me a letter asking why my loan payment was late. It was late because for two months they didn’t even tell me these issues were going on or that they had re-opened the loans. I asked them how do I pay loans that are closed out and they gave me some ludicrous response about them having no control over this and that the computers are at fault.

        Whenever I call them, it’s always the computers fault and they some how never have control over it….

        1. That doesn’t seem fair at all, especially if you have proof that they already sent you a letter that they were already completely paid off. I hope you are able to get those “late” marks removed from your credit report and don’t have to pay that extra $38, that’s just stupid.

          I’ve even heard of the dreaded Sallie Mae and other lenders just waiving a balance when it’s that small and your intention was to completely pay off the loan.

  7. Some advice from an old man. File a formal complaint against them with the U.S. Department of Education. They have oversight over these crazy idiots. Also, consolidate your loans, if you can, so they can’t jerk you around on what goes to principal and interest. If you can’t consolidate, then send separate checks and indicate in the payment line ” interest ” or ” principal. ” Don’t put interest or principal in the memo. They can ignore it there.

    1. Not a bad idea at all Ron, I believe the Consumer Financial Protection Bureau and the Department of Education recently started to “grade” these providers, but I believe it is based more on how many loans are delinquent not really what shady processes these providers are using.

      I believe the lowest scoring provider will receive less volume then, but Sallie Mae is so bad right now it looks like the others may not have anything to worry about just yet.

      I do agree you need to be very direct when you are sending payments in, whether with checks or electronically. Specify you want it towards the principal.

  8. I never thought there could be a worse loan provider than Sallie Mae until these jerk offs bought my loans from the government. They hire the most incompetent people on the planet. They never answer emails, never follow through with requests and trying to get them to do something you have a better chance at winning the lotto.

    I needed a loan verification for a mortgage. 1st I tried email. They never responded EVER!. Then I called they said they would fax…NO FAX. Then I called they said they would email…NO Email. Then I called they said they would mail… Its been 3 weeks and no mail. Last I called an spoke to the supervisor of a SUPERVISOR and she was more polite and professional and she emailed it within the hour.

    So my suggestion to anyone reading this: Go straight to management upon one of the low life’s answering the phone. If management is acting dumb then go to senior management. Don’t even deal with the scrubs that answer the phones.

    1. I’m really surprised that FedLoan Servicing has been even worse to you than Sallie Mae…as I have heard even worse stories about them!

      I’ve dealt with the same issues on their e-mail system and their phone system, having them even hang up on me. I had to send a certified letter to all three of their addresses to make sure it got through! They usually responded to my e-mail request but said they couldn’t do anything, I had to call or send mail in. Glad you were able to finally find someone to help. It just sucks that we are the ones that have to jump through hoops and waste our time for these requests.

      You do have to remember that the people answering the phone only have so much power, just try to be polite and ask to be escalated to a supervisor. They are probably much more willing to help you out when you are nice, as they probably deal with crap all day!

  9. Sallie Mae is the worst company but I consolidated my FED LOANS with Fed Loan Servicing and it is in the 30 day process and will make my first payment in June. I am concerned about these stories but I have had great experience with their customer service, friendly, helpful, and professional! πŸ™‚
    I work for the government in NYC and thankful for the 10 year payment plan, better than nothing but again you never know what will happen with my career…I will not be disqualified if I get a new job that is not the city, just continue paying till the 20 year mark is overwith but for now I am with the city.
    So far I have had worse experiences with Sallie Mae and they are saying they never recieved any notifications or payment which is bs. They are always full of it for the past 8 years! My mother even cursed them out…good lord…imagine what it would have been like if I have witnessed it! Lol.
    I will be okay because I always pay on time and great at keeping an eye on my payments.

    1. Yeah, almost everything I hear about Sallie Mae is not good. FedLoan was extremely annoying at the beginning for me, but now that I’ve finally been able to sort everything out I haven’t had any problems with them. But that could also be because I haven’t had to contact them!

      Glad to hear you haven’t had any problems yet, but I would recommend that when you do start making your payments that you manually assign the payment amounts and not use their automatic payment automatics because that is what caused me so much frustration.

      And that’s great that you are able to get on the 10 year plan, just remember that you should calculate that it actually ends up being less. If your salary starts to go up it may end up being better to just pay the loans off completely. Good luck on your journey to becoming debt free and I hope you don’t have the same struggles I did with FedLoan Servicing!

    2. I consolidated with them after using the calculator with studentloans.gov. I got an invoice in the mail that was in the same amount as the calculator. The first bill was double what the calculator and the first invoice from FedLoanServicing said it would be. I called, they spoke so fast, and lead me in circles. I hate them.

      Can I change?

      1. Was it just your payment that was double? Or did the total amount of your loans double as well?

        I’m thinking it was either an error where they doubled your loans, or you were on the income based repayment plan and somehow they dropped you off of it. I don’t see any reason why either should double.

        Have you tried using their e-mail form when you login? I found more success with that as I was able to communicate clearer and put all my thoughts together. Unfortunately I don’t think you are able to switch federal loan providers.

  10. I had Dept of Education loans, was on an Income Based repayment plan of $68. FedLoan took over those loans, by Income Based repayment is now $366. How can income based repayment be so very different from the 2 companies??? Zero help with customer service. When I was FedLoan before, I was able to refi back into Dept of Ed, but then was bought AGAIN by FedLoan. Now I’m stuck with no escape.

    1. Has your income gone up? The Income Based Repayment plan should be exactly the same, no matter who is servicing your loan. I agree with you that it is very odd your payment has gone up by that much and doesn’t make sense to me.

      Did you interest rate go up when you consolidated back to the Dept of Ed? That still seems like a very drastic increase. Or maybe some of your loans were in deferment?

  11. You are **** ****. If you take the time to do the math, you’ll learn that by default, fedloan distributes the payment across the different loans weighted by INTEREST RATE: if the interest rate on one loan is twice the size of the other, twice as much of your payment will go to that than the other.

    What’s more, you have the option of designating which loans your money goes towards, a feature I discovered on the second time I ever used the site.

    In other words, you’re just too ignorant and dumb to understand anything.

    1. Hi, I’m not sure whether you have read my entire post. When I first dealt with FedLoan Servicing I can guarantee that they did NOT weight any sort of payment by interest rate at all. In fact I even stated “It seems that they had largely decided to arbitrarily put my payments however they felt it – there was no weight based on the size of the loan, and they ignored the accrued interest. The payments weren’t even spread out evenly”

      In fact you can see the two loans that they did decide to put more money towards were subsidized Stafford loans which carried an interest rate of 3.4%, the lowest interest rate I have.

      Yes, I know there is a distribute payment option and yes I knew it the first time I used the website. But I was only paying the minimums on these loans as I had a much higher interest rate on my private student loans. I continued what I was doing from the other service provider and figured that the payments would distribute evenly or whatever, but it turned out to not be the case.

      Now I have learned my lesson and I have manually distributed my payments every month since then.

  12. My loans aren’t even serviced through FedLoan Servicing yet, and I’m having trouble dealing with them! I started a government job in December, and in January, I decided to finally get moving on the Public Service Loan Forgiveness program. I found out I had to consolidate my loans through FedLoan Servicing and get on income-based repayment (which I already am through my current servicer) in order to get on this program. They told me it would take 3-4 weeks to consolidate. It’s been almost 5 months. I email them every week to two weeks. They first told me that my servicer sent a wrong form, or something. Apparently they have now received the correct info, but I still don’t know why it’s taking so long. I just emailed them again. If I don’t get an answer, I’m calling my congressman next week. Since I’m not yet with Fed Loan Servicing , the payments I’ve been making for the past 6 months since I started this job aren’t counting toward my forgiveness. So frustrating. Glad I found your blog so I could vent!

    P.S. I did want to correct something you stated above. You don’t lose your eligibility for the program if you leave government service. Obviously any time not spent in public service don’t count, but the 120 payments don’t have to be consecutive.

    1. I would try calling them if you have the time, I know you will probably sit on hold and have to jump through some hoops but it seems to be more effective. A lot of their e-mail responses just seem to be generic before you get through to someone that can actually help you.

      The consolidation thing seems like where it is not in their interest, the bank will just take as long as possible which is what is happening to you. Have you tried pushing your old provider too? Though it would make more sense to push FedLoan Servicing, it might help in this case. Sorry to hear that you’ve lost so much credit πŸ™ I hope things end up working out for you as soon as possible.

      Thank you for your correction by the way, that makes a lot more sense that it works that way. If you happen to lose your job or switch jobs for a a year or two, you can always pick up where you left off then – much fairer!

      1. I have not tried calling, and I should try that! After getting responses through email initially, I thought that would continue to work, and clearly, it’s not. Thank you!

        1. Good luck, I hope things do work out for you. Sometimes you have to go with “the squeaky wheel gets the oil” no matter how annoying things may get.

  13. They consolidated a consolidated loan while I had an in-school status. Now BOTH consolidation loans are on my account and show up in my credit reports. I have been trying to get the second erroneous consolidation loan removed from my account since the end of May. I have an email from them that states that this will be done in 10 days that is dated June 3. Today is June 27, and the second erroneous loan remains on my account.

    1. That really sucks, I hope it hasn’t caused you troubles if you are trying to get a loan for a house, car, etc.

      Even if they were talking business days, that would give them until about June 18th, so they are a full week later now. Keep pressing them through e-mail and I would even consider mailing a letter, making sure you keep a copy for yourself.

      Don’t let them push your issue aside, reply to your own e-mail asking for updates. Good luck!

  14. To the original author of this article, when you log in to your FedLoan account and submit payment, there’s a drop time option for you to allocate your payments towards the different loans that have been consolidated…

    I just got transferred to FedLoan through Sallie Mae and I have to say that Sallie Mae is the worse on the planet… I haven’t had much issues with FedLoans although I must say that I also had a few loans that received higher interest as a result of the consolidation but I also got a few lowered due to the consolidation too, I think they just average everything out.

    yesterday they just informed me that there’s a repayment plan where it lowered my monthly payments by over $1,200.00!!!!!!!!!!!!! I was stoked.. granted I have to send in the paperwork for it and what not, but my payments went from over $1600/mo down to the mid $300 range… and it’s forgiven after 20 years. I haven’t read through the entire terms, but they had me at 3 digits instead of 4… it’s called “Pay as you Earn” so if someone has comments regarding that repayment plan please let me know!

    1. Hi Katrina – thanks for your comment and I’m the original author of the article. I do know that you can allocate payments, that is what I’ve been doing ever since πŸ™‚ It was just frustrating at first because I thought the auto payments would work fine but now I know!

      Congrats on getting away from Sallie Mae as well, they sound like a nightmare compared to FedLoan Servicing. I believe they use a weighted average and you end up with the same interest rate after the consolidation like you said.

      Also, I believe they just extended the “pay as you earn” program to other students so glad to hear that it can help you out. I’m not an expert on it so maybe this article can help you out: https://studentaid.ed.gov/repay-loans/understand/plans/pay-as-you-earn

      Just be careful as if you do start to make more money in the future, with a plan like this you will end up paying more in total over the life of loan because your loans continue getting larger and larger if you aren’t covering the interest. But if you absolutely cannot afford your payments this program is a great fit for you. Do lots of research!

      1. Thanks for the tip! and yea she told me I have to re-apply every year, but it’s still better than paying $1600/mo!! That’s rent for a 2 bedroom apartment in a lot of places! Plus I already have to pay rent… and after 20 years if I can’t pay it off, my loan is forgiven (at least according to the rep) but yea Sallie Mae was RIDICULOUS I had a one Bar study loan from them for $15k and in less than ONE year it managed to accrue $5k in interest because it was at a 13-14% APR!!!!!!! even their own rep said I would’ve been better off getting a o% APR credit card for a year and then pay it… so ridiculous!!!!!

        1. Wow that is a terrible rate, are some of those private loans? You might want to look into getting those refinanced at a lower rate if possible too!

          Good luck with going with pay as your earn, I’m pretty sure the rep is correct that your loan is forgiven after 20 years. You will have to pay taxes on the remaining balance though.

          1. Yea it was a private loan through Sallie Mae, hence why they’re so evil… and I don’t mind paying taxes at the end of 20 yrs because I am hoping that at the end of 20 years there won’t be much left to pay taxes on!!

        2. Hi Katrina, be careful about the Pay As You Earn (and ANY loan forgiveness program). Right now, at the end of the term any amount left in the loan is forgiven, which is great. BUT – you do pay taxes on that forgiven amount as “income,” which could be 25-50% depending on your household income in 20 years. I looked at sticking with Pay As You Earn payments and hoping it worked out, but realized it made more sense to sign up for the program and put as much extra money as possible into my higher interest loans each month. It means I do have to scrimp and save a little more, but I also won’t be stuck with a huge tax bill in 20 years.

        1. I believe Public Service Loan Forgiveness is 10 years, 120 payments so 12 a year for 10 years. No taxes are paid on the remaining balance.

          For the pay as you earn program you get a set payment based on what you make, and if there is still a balance left after 20 years – that balance is forgiven. You do have to pay taxes on the forgiven balance.

    2. Hi Katrina,

      I am an attorney investigating FedLoan Servicing regarding their potentially wrongful practice related to the “Pay as You Earn” repayment plan. I would like to ask you a quick question if you don’t mind. You can reach me at djh@classactionlaw.com.

      Thank you,


  15. This to Katrina. Pay as you earn is the same psychopathic scheme used in the mortgage industry to stick people with loans they knew they could never pay back. It is negative amortizing. THAT IS IMPORTANT. Interest accrues daily on student loans. So you have to figure out what your daily interest cost is (principal loan balance times interest rate divided by 365). If your daily interest cost is $12 that totals $360 just in interest per month BEFORE any payment is applied to principal. Although if your before monthly payment was $1,600 per month, your daily interest is probably closer to $50/day. So if you are only paying $300 per month, you are not even cracking down the interest and THAT interest not being paid each month ADDS to your principal. So in 20 years, you will owe an “S” load of money on your loans Much more than what you owe now and that forgiven debt is fully taxable. Student loan debt is the evil plan of those who run things to burden students with suffocating debt. It is totally unnecessary. The government could just pay the school WITHOUT making it a loan. But then who would make money off your suffering?
    I mean, even one of the basic tenants of contract is thrown out regarding student loans: you do not have to be of legal age to sign the loan contract! You can be 17 and sign your life away.
    I have had 8 and 4 and 1 year battles with Citibank, Sallie Mae, Fedloan. They are all vulture profit-first criminal organizations. I have documented everything, certified letters, gotten congressman, agencies, involved. They all agree that I/we are being screwed but do nothing about it because they run the US Dept of Education (the student loan servicers).
    This student loan scheme began back in the 70s. Of course college does not cost $30 to $50K per year. That is absurd. In fact, if you examine your college’s financial statements, you will see they turn a profit each year and raise tuition nonetheless, and they have billions in the bank. It is all a profit-making scheme.
    We need a paradigm shift in thinking in this country. And pretty soon. College debt is over a trillion dollars and rising.
    what say you, young people?

    1. This is a good point, you really need to understand with pay as you earn that if you aren’t covering the interest your loan is just getting bigger and bigger. Pay as you earn is more of a temporary solution or one where the person does not think they will ever see an advance in pay. As soon as you get promoted or get a big pay raise, that amount will increase and you will now have to pay an even bigger loan off with normal payments.

      Obviously if you can’t make the payments and this program allows you to do that, it’s totally worth it. But you need to fully understand it before committing.

      And I fully agree that more education on student loans, payments after school, starting salaries need to be taught to prospective college students as well as alternatives. I know that when I was 17-18 I did not fully grasp just how much I would be paying back each month.

  16. I’m beyond frustrated with FedLoan Servicing. I was on an IBR plan with Direct Loans which were qualifying payments for Public Service Loan Forgiveness Program. I spoke with a representative who told me switching over to a standardized payment plan still qualified and would lower my payments. This genius put me in a 25yr repayment plan which doesn’t qualify. I’ve been paying this for 2 years!! 24 payments that do not count toward my program. Now they’re saying they have no record of this and there is nothing they can do. I am LIVID!!!!

    1. The government should have some record with it, as I believe even if you go off the program your progress still counts and can be restarted at any time. I would continue to pester them and see if they can dig up any other information on that. I hope you are able to get things worked out with them.

  17. I made the mistake of trying to sign up for the Public Service Loan Forgiveness (PSLF) program only to find that the only plans that are accepted under this plan are the income-based ones, and that based on the monthly amount I would have to pay, I would end up paying it up before ten years had elapsed. I called and tried returning to the previous plan I was on to no avail. My monthly payment ended up tripling. Yes, I could afford it, and sure, it meant that I would be paying off my student loans sooner as opposed to later and ultimately saving money, but I was still not thrilled.

    When my income-based plan expired after a year, I was given the option to renew it or go onto some other unnamed plan that was about two-thirds less than what I was paying a month. I called them to try to get a jump start on this lower payment plan, and was put on a plan that–I kid you not–was four times what I was already paying. I tried calling again only to be told my loans were “too old” to be put on the standard repayment plan that was for ten years, and apparently my only option was the income-based one again.

    Bottom line: Don’t call them for anything. The people don’t know what they’re doing, and you get a different answer every time. Somehow or another, you will get screwed over. Emailing is also pointless. Their responses are generic and useless. I would file with the BBB, but since they’re a quasi-government entity, I don’t think it would matter. And I doubt the Department of Education gives a rat’s behind

    1. Have you had any success with your principal going down? With all the plan switching I would make sure that your loan is actually getting paid off.

      Also try to get them to specify which your “plan” is actually called and go do some research on it, seems weird that they aren’t telling you exactly what plan it is. There’s quite a few options for repayment so make sure you know which option you are getting into.

      I do agree that 90% of the e-mail responses they send out are just generic ones, but eventually I did receive a very short response that was the answer I needed. I didn’t really make any progress on the phone though, I ended up having to send in a certified letter. I think like with most big companies it depends who you talk to.

  18. Sorry to hear all the horror stories, I’ve been with fed loan through my BA and MS. Their site has always been fast and easy to use for me. I like all the extra info about each loan and the choices about how to pay.

    1. Ann, it is important to note the government has 11 authorized student loan servicers to handle our massive, suffocating trillion dollar debt. You have NO choice over which servicer will be assigned to your loan (in the land of the free). So they pretty much can do whatever they want. Their shenanigans are endless to get more money from borrowers than contractually allowed. For example, Fedloan only allows payment to be made (online) on a business day. If you go onto their website on Saturday, payment CANNOT be made until Monday so you are forced to pay additional days of interest. Additionally, Fedloan holds online payments for between 2 to 5 business days…more extortion of interest. Further, you can only make 8 online payments a month. What kind of arbitrary rule is that? This is important to borrowers with 8 or 12 different loans they are managing. If you (are forced) to send a payment by mail with specific instructions as to how payment should be applied (to which loans – maybe with a higher interest rate), Fedloan will not post this payment according to your request ONE HUNDRED percent of the time. They will post the payment however they want.
      Apparently, no one there can read.
      Daily interest for student loans is important. If your daily interest due on your loans is $20 (not unusual for someone with $85K and up in student loan debt), holding or postponing payments EACH MONTH can cost the borrower an additional $100 EACH MONTH.
      College is no longer about education.
      It is about feeding the coffers of the predatory student loan servicers (the chosen ones), the administrators at colleges who are top heavy and paid millions to steer unsuspecting teenagers into a lifetime of debt, and the shadow financial markets of hedge funds, interest-rate swap agreements, and derivatives.
      It is a scam.
      Thomas Jefferson said “there are two ways to enslave a nation: by sword or by debt”.

      1. CALynn it does suck that we have no choice of who is servicing our loans. I had no problem with my previous loan company before I got bounced around to FedLoan Servicing.

        You should be able to date your payment for Friday though, and even though they hold your payment it should end up back dated with the interest being correctly calculated.

        Also with the “amount of payments” if you specify each individual loan at the same time, they will group that as one payment even you are paying on multiple loans. I do this every time now. Unless your loans all have different due dates? Then I could see this being a problem.

        I do agree with your other thoughts though, and it is important to make your payments because each day of interest adds up and can save thousands over the life of your loan.

    2. Glad to hear that you haven’t had any issues Ann. I will agree that the site has always been fast, but I wish they displayed all the loan information on the payment page. I do agree that some parts are easy to use, but other sections of the website were frustrating to me at first. I’ve obviously since had no problems with them going forward.

  19. It has been a nightmare since my loans have been transferred to Fedloan Servicing to be eligible for PSLF. I served a year in AmeriCorps so I could receive money to pay off some of my loans. I sent in two payments in July and they still have not processed on September 2nd. I have called 3 different times and i’m sure most of their minions are high. No one seems to know the answer to why my payments haven’t been processed. One genius told me to use AmeriCorps funds as a supplement to cash. I worked for a year in poverty for that “supplement” so no I will be using the award. I have received an e-mail about my account going to collections. I’m so frustrated, I do not know what to do. AmeriCorps said they have had similar complaints about Fedloan Servicing. I just want my old servicer back to rob me of thousands in interest.

    1. Have you tried filling out their e-mail complaint form? Or maybe sending a letter in to them? Get something in writing that has said you paid.

      Was the money withdrawn from your bank account? You may need to call in or they will send it to collections if they feel they aren’t receiving payments from you (obviously not your fault in this case)

      1. The money comes out of the AmeriCorps portal, in the portal it says the payment has been accepted by the institution (FedLoan). I have copies with proof of payment sent but FedLoan has not applied it to my account. I was supposed to receive a call today with some kind of an explanation but I doubt that will happen. I will make a formal complaint today. Thanks

        1. One thing you might want to do then is get in contact with AmeriCorps (they might be easier to work with, not sure) and make sure that they are sending the payment to the correct address and have your correct account number on file. Let them know the FedLoan states they haven’t received the payment and see if they can get in contact with them to sort this out – saving you some work as well. I would just make sure to not let up on this, if you can prevent anything from going to collections.

          Sorry you are having to deal with this, I hope things work out for you.

  20. A lot of you seem to have issues that stem from not understanding your student loans and how payments and payment plans work. This in turn causes you to blame your servicer for things that are not their fault. I suggest you educate yourselves before you start blaming them

    1. I think you make a valid point, but in a lot of cases it seems the providers try to make things as difficult as possible. Things have gone much smoother for me once I sorted everything out/figured out the system. But student loans are daunting and I can see how a lot of people get discouraged when they feel the “system is against them” at first.

      1. Uh, OK, let me put this in perspective for those student loan debtors who fail to understand that the system IS the problem. College is no longer about higher education. It is about filling the pockets of the finance industry, loan servicers (who will and DO rip debtors off ad naeusum), the shadow markets of hedge funds, puts, calls, derivatives (who bet on whether you can pay back $45K in loans on a salary of $30K and that insurance pays off nicely when you fail – like the mortgage industry) and then of course the college administrators who each are paid millions to lead unsuspecting teenagers(!) to sign on the bottom line of the loan agreement selling them out big time.
        I have over a decade of experience (personal and as counsellor) seeing how student loan servicers (there are 11 approved by the govt) will and DO hold online payments for days before posting to your account in order to jack up interest paid, tell students they are delinquent when they are not, curtail online payment options so they must mail in payment and then it gets lost or delayed. Just to name a few.
        This is a sick, sick system which the govt makes a fortune off of. The US govt makes MORE money if you default on a federal loan (and I am not even discussing private loans which are the worst).
        I will stop here. Get a life. Get a reality check.
        You are being screwed and then some.
        Uh, debthater: Make no mistake: The system IS against you.

  21. There are not enough words in the English language to convey my extreme disgust with My Fed Loan servicing. I have had the displeasure of dealing with them for over a year now…

    A bit about me; I required a loan for a four year graduate program. Fast forward to graduation and I am $200,000 + in the hole. Fed loan acquired my debt and the the nightmares began.

    They initially sent my repayment at just shy of $2,500 a month. That is nearly $30,000 a year, AFTER taxes! I applied for income based repayment which was a nightmare. They took nearly two months to process my application, responded to maybe 1 in 5 emails I sent and only acted when I called to complain.

    That was a year ago. Fast forward and it is time for me to reapply for income based repayment. I submitted my application electronically, which was declined since they could not determine the frequency of my pay. Bi weekly, clearly printed in the upper right hand corner of my pay stub, bi weekly… SO, I resubmitted my application in paper form since they are incompetent. I am STILL waiting for an answer as to my application and it is now March 2nd…

    I called their terrible customer service today and was told I need to continue to wait, and the woman on the phone told me “if it was my loan I would NEVER let it enter forbearance”. Good for you, what are my options when the loan repayment you have me enrolled in is HALF my income?! I have sent them countless emails, to which they never reply. And when they do reply they remind you if your payments are late they will report you to all the credit agencies…

    I have never missed a single payment, and have continued to pay my bills EVEN in forbearance, and this is how this company treats you. AVOID, AVOID, AVOID!! THEY ARE TERRIBLE!!

    1. Hi Zach – if you are having trouble with income based repayment it should be a straight forward process. You should not have to deal with the headaches you went through. I believe FedLoan Servicing is one of the only servicers that handle this program. If you have problems going forward make sure you contact the student loan ombudsman.

      You can do that here: https://studentaid.ed.gov/repay-loans/disputes/prepare/contact-ombudsman

      If it is a legitimate complaint they WILL escalate the situation and help you out. If a company receives too many complains they will get a smaller share of the loans compared to the other companies!

      Unfortunately you can’t outright avoid FedLoan Servicing as you assigned a provider, you don’t really get to choose πŸ™

  22. I’m not sure what to do about my situation. I consolidated my graduate and undergraduate loans with Fed Loan. Now their system says I owe double the amount. Now they have admitted that it looks like the loans were entered twice but have yet to fix it. This was discovered last June by me and with no resolution. Does anyone know what recourse I have? I haven’t made any payments yet and they put my loan in forbearance while they sort it out. Is there anyone that can help? Is it possible to get my loans forgiven if they don’t fix the issue?Is there a limit on situations like this?

    1. That definitely sounds like a major mess up on their end. Make sure you aren’t losing even more money while your loan is in forbearance as this error is not your fault. I don’t think it will be forgiven or anything, but the mistake should be corrected so you can start making normal payments.

      I would immediately login and use their contact form to see if there has been any progress on solving this. Then I would try calling them as well – be polite but get the point across you want this issue resolved.

      You can verify your loans on this site: https://www.nslds.ed.gov

      If after verifying your loans and contacting them you still haven’t made any progress, I would contact the student loan ombudsman to help on your behalf: https://studentaid.ed.gov/repay-loans/disputes/prepare/contact-ombudsman

  23. Thank you so much for your advice. I’ll start there. I don’t have a problem paying what I owe but I’m not paying double.

    1. No problem, and I fully agree with you. Definitely stay on top of them and don’t let up! There’s no reason for you to pay for more than what you owe.

  24. Hi – so I have been doing income-based repayment for about 4.5 years now with another servicer. I am also planning on doing the Public Service Loan Forgiveness.

    There is an “Employment Certification form” that you can choose to complete and mail in to calculate how many of your payments so far have counted towards the required 120 payments for PSLF. The catch is, though, that once you submit that form, your loan gets transferred to FedLoan. I am reluctant to do this as my current servicer, while I’ve had problems with them in the past, is now doing everything correctly and competently. I work for the government and will likely be in the same job when time comes to forgive the balance on my loans, so I am not too worried about my employer not being counted as a qualified public service employer. But, it would be nice to have something in writing that all the payments I’ve been making over the years count….

    Has anyone else dealt with this situation? Any thoughts?

    1. I know that FedLoan handles all PSLF, so maybe your best option is to reach out to them first? I think it’s worth the transfer if you qualify for PSLF. It looks like you should have no problem if you are on IBR and your employer is qualified.

      I’m not an expert on this subject unfortunately, but here are some resources I found:



      One thing that seems to be key is to NOT consolidate if you have already been making qualifying payments. This will cause you to have to start over. They definitely don’t make these things straight forward.

      I would say go ahead with the form and get the ball rolling to see where you stand. FedLoan is frustrating but they have to play by the rules. You can check out my other articles on them (I wrote a few other follow-ups on this). If you do deal with legitimate problems, you can always write the Student Loan Ombudsman. I think the benefits of PSLF will outweigh any issues with FedLoan Servicing.

      1. Thanks for the tip! I’m still a bit hesitant because in theory I can continue on as is with my loan servicer and then apply after my 120th payment and it should all go through smoothly. I consolidated long ago, so all my loans are in one place and all eligible to be forgiven. I am just weary of voluntarily choosing FedLoan earlier than I have to based on all the horror stories I’ve read!

        1. Hmm that might be a solid strategy, wait until the last possible minute and then switch over. Is there a way to keep track of how many payments you have? Like an official count? Or is that what you were trying to figure out?

          Obviously you can keep track yourself but I was wondering if the website gave you a status update or something.

      2. I currently have loans on IBR and want to submit the certification form to fed loan. I am ok with the loans being transferred but do not want to consolidate. How do I ensure that they will only transfer existing loans and not start a process to consolidate them? I am hearing from some people in the program that they automatically consolidate when they receive the loans.

        1. I know that I have heard quite a few times that the loans automatically consolidate when you enter IBR. I think you should definitely be cautious before submitting the form, make sure that you have verified with them that it will NOT consolidate your loans.Try to get in contact with multiple people at FedLoan and get full confirmation before doing so.

          This website seems to think you do not have to consolidate to take advantage of IBR: http://www.ibrinfo.org/faq.vp.html#_If_I_have

          But please get confirmation from the official source first, and feel free to report back after to help others!

  25. I thought consolidating my loans were a good idea, but now that they are consolidated with FedLoan, I’m afraid I may not have made the best decision. I had to remove myself from the Public Service Loan Forgiveness Program because I couldn’t make the income-based payment. It was just to expensive. The fact that they base the income-based payment off of your Gross income is the first issue. Then you have the daily interest accrued which is ridiculous!

    Also…Looking at my loans, I am almost convinced that they attached a few other loans on there that don’t belong to me. It’s hard to believe that I owe the amount listed. It’s complete madness. It’s completely unfair. What can be done about it?

    1. The income based repayment program should only be based off 10% or 15% of your discretionary income based on what plan you are on.

      Try using this calculator to play with your numbers: https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action

      Are you living in a high cost of living area?

      Double check your old statements and add all the loans up. Make sure that it is equal to your new consolidation loan. If it’s not get in contact with them ASAP to point out the error!

  26. USPS confirmed delivery of our payoff check on Monday. The check cleared our bank on Thursday. It’s Friday and it s not showing up in our account yet. Daily emails to them from their website since Monday are unanswered. We get an auto reply saying someone will get back to us. It hasn’t happened.

    1. I would send an e-mail with the check # and the account # (or loan numbers) that it should be applied to. Be as specific as possible and tell them the dates and give them the tracking number or whatever you need. I’ve never dealt with sending in a physical check to them. It seems like with these issues it’s persistence that pays off…even if it is a waste of your own time unfortunately.

      Can you confirm with your bank on who actually deposited the check or accepted the funds?

  27. I’m going through the same things. I mistakenly decided to consolidate my student loans using student advocates group. They wanted me to pay for processing and told me to stop making payments on my loans and to inform them of any communication with the department of education. I’m 4 Months in and after researching the company is listed as a clothing store, loan company, and is connected with Syracuse university rowing teams tax exempt fundraising accounts. I cancelled my direct payment through my bank and tried to contact the loan department. The student loan department explained I had a zero balance. I asked what company to contact to make payments on my loans to the only had initials of a company. Sadly I had no luck finding the company by the information from the loan department. I now have several negative marks impacting my credit score and now 4 Months down the road find out my loans have been transferred to fedloan servicing. Please help me with this since clearly I’m not the only one going through this.

    1. Unfortunately a lot of those student loan companies that offer consolidation help or negotiation strategies are complete scams.

      What is the loan department were you contacting during this time?

      Unfortunately Federal loan servicers are unable to negotiate or remove negative marks from your credit report. The only thing I can suggest is to move forward and start making your payments with FedLoan Servicing. It sucks, but you should be able to slowly bring your credit score back up with on time payments.

  28. I feel everyone’s pain with respect to FedLoan as a servicer. The bulk of my law school loans are with them, and I am beyond frustrated with my situation with them. Has anyone else had any luck in specifying loan payments on the website? When I log into my account and go to the payments section, there is one tab in the payment block just for general payments, and a second tab that says “specify payment amounts.” Not quite sure why that’s there, as there is (1) no option to specify payment distribution and (2) no memo line or comment section or anything where I could leave a written direction. From reading the comments above, is the best way to actually get extra money paid to your principal to make your monthly payment and then send a check directing that the funds only be paid toward the principal balance?

    My second question – my loan overview shows about $4,270 in “unpaid interest.” Does this amount have to be paid before I can direct extra funds to be paid to the principal? I’m a little confused here, as I’m already paying $1000/month and each statement shows $0 toward the loan principal. Appreciate any advice!

    1. The unpaid interest refers to interest that accrued while the loan was in deferral. Most likely because you were still in school or doing service that qualified for deferral of payments, but the interest was still accruing. This has nothing to do with fed loan, it’s the terms of the loan.

      From a practical standpoint, it makes no difference whether your paymemts are applied to unpaid interest or the original principal balance. You still owe all of the money. It’s like if you were bailing water out of a boat in the rain. It would not matter if you were bailing the new water or old water, you would just need to bail as much as possible to keep from sinkimg.

    2. To follow up on what Cary Raffle has already said, when it comes to student loans you must always pay the unpaid interest before the principal is touched. No matter who your servicer is that is how all the loans work.

      Are you able to see how much interest accrues on your loans monthly? You minimum payment should be able to cover the amount of interest that accumulates and make a small dent in the principal for every single loan.

      You should be able to specify payment amounts using the tab you are speaking of. I can’t access that tab anymore, but here’s a screenshot of what I used to see where you can specify each loan amount:

      Full article is here:

      If you have any more questions, don’t hesitate to ask.

    3. Ashley, on the Fedloan website when you click on the “specify payment tab”, it should open up to reveal all your loans (you have about a dozen, right?) And you can specify payment to which one(s) you want. Fedloan only allows 6 online payments per month (this is to inhibit/deter managing getting ahead on your loan repayment). The ONLY way to effectively and economically repay your student loans is to know your daily interest amount and pay MORE than that with each payment.
      If you have law school loans (I HOPE they are not private), then you probably have about $150K to $180K in loans. So your daily interest is about $30. And YES you have to pay accrued interest BEFORE you can touch principal. Student loans are, by design, set to keep you impoverished.

  29. I received that Fedloan is taking over my Dept of Ed loans. I was able to consolidate but was in default. I am with a program with ERS. they told me after 8 months of ontime payments i will be out of default. but instead i receive info on Fedloan. I was approved for the consolidation 2 days ago. does this mean im out of default? i have payment set up etc.. im confused

    1. The first thing I was do is talk to FedLoan either on the phone or through their e-mail support and ask them what standing your loans are in, they should know the best. The second resource is using the national database, they should have information too: https://www.nslds.ed.gov/nslds/nslds_SA/

      Another way to see your credit and loan standing is to sign up for http://www.creditkarma.com. It’s completely free and you can get an estimate of your credit score and also see all of your accounts that are reported to the credit bureaus. Just remember that it usually runs on about a month or two lag compared to what may actually be happening.

  30. FedLoan.gov is a deceptive servicer as evidenced by their website. They do not show the total principal and interest on the main Account page. You have to search for the accrued interest in details. Also, if you overpay your monthly payment on your next months statement, the payment will be lower or “no payment due”, however, FedLoan does not advise you the amount of interest you will be charged. This is a deceptive business practice. Also, to apply direct debit to get a 0.25 reduction in interest required you to answer several credit related questions. I got one wrong and had to write in to request a PIN number to sign up for direct debit – really?!!! This is ridiculous. I have signed into my account, why make it difficult for me to sign up for direct debit…oh because, they don’t really want me to get the interest rate reduction. There should be a class-action lawsuit against them…their business practices are very shady. I recently applied at http://www.meetearnest.com to lower my rate and to be done with FedLoan. They are many other start up companies who will refinance your FedLoan student loans…search google. Best,

    1. Yeah, the lack of information on the FedLoan site is pretty frustrating I will agree with you. You would think it would be easy for them to display all that basic information right in front you. I never bothered with the automatic debit because I had too many headaches with them.

      I actually just refinanced with Earnest too, and so far they’ve been great. Just realize then when you refinance federal loans to private loans you are losing some of the income based repayment protections!

  31. I have a question, Debt Hater. I completed graduate school in April, and will still be in my grace period until the end of October. I have been working on paying off each loan + it’s interest individually one-by-one through FedLoan Servicing’s “specify payment amounts” tab for the last couple of months while I’m still in grace. I have a pretty high income with my brand new job, so I anticipate being able to pay $2500 monthly toward my loans for the next couple of years until they are all paid off (my anticipated minimum required monthly payments would only be about $850, per my loan payment calculator). My understanding is that if I am in this “Paid ahead” status, that I can continue paying each loan + it’s interest one-by-one as I have been. Am I correct? I don’t want to have my payments dispursed to all of my loans or their respective interests. Paying each loan one-by-one is my wish. I hope to avoid any surprises like this once my grace period comes to completion at the end of October. Let me know if my assumption is correct.

    1. Yeah, you should be able to continue specifying your loan amounts and that is what I recommend doing with the FedLoan website. That’s how I paid off all my loans from them (and I was not in the grace period). I would specify like $1500 towards a single loan, and then put just the minimums towards my other loans.

      Just make sure that you keep paying the minimum payment on all your other loans, and then throw all your money towards whatever one you are trying to pay off. Hopefully that clears things up for you.

      1. My hope is to avoid the monthly minimum payments and only pay large targeted amounts, paying off one loan + it’s interest at a time. In other words, I never want to have any of my payments spread out over all of my loans. Is this possible? Isn’t this what being in the “paid ahead” status will allow?

        1. That’s actually a good strategy, I understand what you’re going for now. I’m not sure if it’s entirely possible in the way you are thinking.

          I know if you keep paying at least the minimums it will keep advancing your paid ahead status. But once your grace period ends, you might be able to only do that one month. Then the next month you will have a minimum payment again, and then you can advance the payment date again the next month. I’m not 100% positive on this though. Maybe your payments during the grace period have pushed your payment date really far in advance.

          Maybe a phone call or an e-mail question to FedLoan can clear that up?

          If you are doing that, I would definitely target the highest interest loan to save the most money though. And make sure they aren’t holding your payments for the next due date and applying them to the principal + interest immediately.

  32. Beware. Beware. Do not sign the Public Service Loan Forgiveness (PSLF); Employment Certification Form. The form CLEARLY states that by signing it you agree to TRANSFER your loan to FedLoan Servicing. I say clearly but it is kind of hidden in bullet #4 on the “By signing this form you understand” part. You are screwed once the form is signed and there is no turning back. FedLoan Servicing is a banking contractor who knows exactly how to make money. Thank you for this blog so that I could research before signing. By signing the form, you automatically transfer your loan and they will say that you do not have any qualified payments. Your payments will be increased in order to pay off the loan in 10 years and you will have multiple headaches listed above.

    1. Rick
      Yesterday I called fedloans. I have the girl all my information over the phone. She approved me for an amount & emailed me 5 pages titled

      Program change form
      Limited power of attorney
      Automatic payment information
      Terms & conditions.

      I then e-signed these documents. After a sleepless night due to further investigation I no longer want to switch from my my current loan provider.
      Can anyone tell me if I tied myself in with them?

  33. I have had NOTHING but nightmares with these people. They refuse to accept my payment toward my 120 for public school teacher and are making my life a nightmare. It is almost like terrorists. I hate to say that but when I go to my mailbox and there is yet another letter from them I get a knot in my stomach. They acknowledge that they have messed up my account and apologize but will NOT fix the problem. What can I do????? Any suggestions?????

      1. Thank you very much for your reply and interest. I have already reported them to the BBB and the MO Attorney General but will pursue your suggestion. Thank you again.

  34. My loans are just going into repayment through FedLoan Servicing and it is already terrible. Extremely slow email responses, website is very hard to navigate, basic information (due dates, penalties, payment specifics) are hard if not impossible to find. I cry….I cry.

    1. Sorry to hear that. The due dates should update each time you make a payment, especially if you go into the “specify my payments” options. I hope you are able to stay on track even though you’re with FedLoan. There is an end to student loans, I promise!

  35. I decided to switch my Fedloan Automatic debit from one checking account to another, both of which are attached to my savings account under the same credit union. It is- for all practical purposes- the same account, just different allocated spaces. I finally decided to switch the Automatic Debit off of my main checking to the secondary which I no longer use (it was originally for my college funds). I followed through with their silly requirement to re-apply (seriously?) for Automatic Debit in order to switch checking accounts, only to find out after it was all said and done that it could take up to 2 MONTHS for the change to take place. It also looks like my automatic debit may have been switched off from the account it was previously on.

    Why is this process so archaic? No, archaic is too polite. Why is Fedloan so ridiculously stupid? Also, I apparently need to call them and let them know tomorrow that I made a request for this change.

    It will take every ounce of willpower to not scream at the poor soul that answers my phone call.

    1. I would also use their e-mail form to confirm that you made a request for the change, it’s better to have a written trail to go along with the phone call.

      I agree that the 2 month change is a little ridiculous, but I believe they say that because it won’t apply to your next payment. It gives them flexibility in case someone changes their payment information right before their payment is due. At least that’s the only reason I can think of.

      I hope you have no issues with changing your account though! Make sure you login and confirm the payment was actually sent so they don’t mark you late.

  36. I have dealt with all the biggies at this point, Sallie, Navient, and now, FedLoan. They are all the same. I had no choice to be switched to navient. They were just as bad as Sallie Mae. Years of aggravation, frustration, incorrect information and back and forth paperwork. The end result is always the same…… they are making a fortune in interest payments. My current loan of 92,000 (increased over the years by rolling interest into the debt, a sneaky way they make money) will end up costing me $222,000. I recently decided to consolidate (somehow I thought this would make life less complicated in dealing with my repayment) and because I wanted to apply to use the Public Service repayment plan, I HAD to be serviced by FedLoan. (Secretly, I believe all three are just one huge company who hire the worst of the worst of customer service people) Now I find out my long career of public service doesn’t count because the type of loans I had wouldn’t qualify me. BUT if I had consolidated years ago, they would have. Never once did anyone explain this information to me. I think that is my greatest issue with all these companies. They only tell you one small piece of the information. When you make, what you believe to be an informed decision, it only serves to cost you more money. I learned several years ago the whole student loan thing is a scam. A huge scam leaving those of us who pursued an education at the mercy of the loan companies. There is no way to handle complaints. There are no customer service people who work through all the options so you can make a true informed decision. At 50 years old I will end up willing this debt to my children. I am relatively debt free except for this student loan. I am finding it difficult to purchase a home, a care, or enjoy some fun time that I should be able at my age, all because of student loan debt. I am only left feeling like I want to give back my diplomas but I just don’t see the benefit of my education. I have chosen to work in some very poor areas of this country and that means nothing. Huge companies are making money off of people just like me. Our lives are dictated by the student loan nightmare.

    Thanks for allowing me to rant. There are no other ways to get the word out about student loan interest scams. I am all for paying my debts, but this is out of control. We have no recourse, no way to make honest informed decisions. Just mountains of paperwork that results in more and more interest being paid.

    1. Sorry to hear about all of your frustrations Amy, I have heard before that anyone switching to Public Loan Forgiveness has to use FedLoan Servicing unfortunately. I wish that there was mandatory information sessions heading into college and leaving college on how much exactly student loans cost and all the repayment options that will be available to them. Plus a lesson on just how much interest really builds – it’s a huge pain!

      No problem in leaving a rant here, that’s what this is for. I hope you are able to get past all the paperwork and frustration and are able to take advantage of that program.

  37. Hello. I am on the Automatic Direct Debit and my payment is set to withdraw from my account every 18th of the month.

    On September 15, 2016 I logged on to my account and increased my automatic debit. So the regular monthly payment plus the additional payment is scheduled effective October 18, 2016.
    I received a confirmation for this change.

    To make the story short…
    1) the automatic debit scheduled on the September 18th was not deducted from my account
    2) FedLoan Servicing automatically put me on a Forbearance without my consent because I
    was 9 days past due
    3) my account shows I am enrolled in Automatic Direct Debit but not receiving the .025 discount
    4) per customer service, they don’t even see on their end the additional payment that I
    scheduled on line nor have any confirmation of the transaction
    5) Despite of all the payments I made, my student loan total balance both interest and principal
    CONTINUED TO INCREASE. Where did all my payments go?????

    The DOE should investigate FedLoan Servicing! With all these cries and complaints…we are so helpless and no one seems to hear us! HELP PLEASE!!!!!!

    1. Sorry to hear that you are having so many problems making simple payments, I think that is why it’s so frustrating dealing with them. Have you taken any screenshots of the payments? Or any funds withdrawn from their bank account?

      I would think having proof of enrolling in automatic debit should eliminate any forbearance status. Definitely stay on top of them and don’t let them try to penalize you in any way!

      You are also able to file a complaint with the Student Loan Ombudsman if you are unable to resolve your problem directly with them. This will basically create an official complaint against the provider: https://studentaid.ed.gov/sa/repay-loans/disputes/prepare/contact-ombudsman

  38. Can anyone advise what’s the next best alternative – if that even exists? For example, has anyone recommendations on a reputable company for debt servicing?

  39. I recently applied for student loan forgiveness (I was with Mohela) and I knew my loans would be transferred to another company, but I had no idea how horrible Fed Loan Servicing was. I set up an account with them while I waited for my loans to be uploaded to their website…checked the site a couple of times and didn’t see anything. A few days ago, I log in and see that they said I missed a payment on 12/13/16 but they never notified me/sent me a bill. They have a bill dated the 23rd but it doesn’t even mention a pay date for the 13th! They have me as past due and have combined that payment with January’s payment. They also have my loan status as delinquent (I thought this was because of the “missed” payment but isn’t delinquent when you haven’t paid for several months??).

    I called Mohela and I can’t get the loans transferred back. From my recent research online, it looks like the Dept. of Education is in charge of that. I feel trapped! I actually had a good experience with Mohela and wished I’d never applied for student loan forgiveness. Had I had known how Fed Loan servicing was when I applied for forgiveness, I would’ve never mailed that application.

    1. Definitely try calling them and explaining to the customer support person what happened! It’s really not fair as you weren’t able to make the payment while they were being transferred, so hopefully they can help you out and be understanding. You can also send something to their online support, but don’t wait too long. I would also try to make an additional payment in good faith ASAP if you are able to. Most places will not report any sort of delinquency unless it’s older than 30 days.

      It is true that all forgiveness programs are done under FedLoan Servicing, which is unfortunate.

      1. Just wanted to update…I have been contacting Fed Loan Servicing about the payments I made and even uploaded proof to their website (I wanted them to apply the last payment I made to this month’s bill). They have been helpful and trying to work with me. Today, I checked my bills from my previous lender and realized that I miscalculated what I thought I owed–I didn’t make a complete payment to my previous lender for November so there was actually was a balance carrying over for each bill which is why I had a missing payment. Yikes! So it was an error on my part. I paid what I owed so hopefully everything will get back on track now.

        1. I’m glad to hear that they were helpful with the transition, the lag time between loan transfers and who you should be paying can be confusing. I hope you are able to get back on track like you said. Best of luck paying off the rest of your student loans!

  40. I have two loans serviced by fedloan and I’ve never had any problems, but I guess I’ve never needed anything from them. I don’t allow them to automatically assign payment, but I made those calls myself so I could pay off my unsub loan first (will probably be going back to school at some point, so why not?). Then it’s just monthly automatic payments in the amounts I specified. We’ll see what happens when I go to pay them off, but hopefully it goes smoothly.

    1. They seem to be much better now, they changed the payment interface a little bit. I had no issues with them once I started manually making all my payments. It was the automatic ones that were annoying for me at least!

  41. I had a few loans through Nelnet and my majority chunk of loans were through Fedloan. I was paying minimum on fedloans while trying to pay off Nelnet loans. In June I too realized I had zero balance on Nelnet loans and saw an electronic letter stating FedLoan would be taking over those loans as well. My loans were sold right before my June direct debit so June was never paid. It is now half way through July and finally see all my loans on FedLoan. Since I never paid my June Nelnet loans, they are delinquent through FedLoan. Although there was never any way for me to make a payment on these loans. I am delinquent 19 days. I called the customer service and all they could do was out in a Forbearance for the month of June, which takes 15 days to process and in the meantime I am still responsible for the past due amount. Cutomer rep states since it is not the end of the month the delinquency should not affect my credit score. I am truly hating FedLoan already. I always liked Nelnet, never had a problem with them and customer reps were always friendly.

    1. Were you even able to make a payment on Nelnet? Or because of the zero balance you weren’t able to do that? I’m not sure how that would have helped either, you probably would have ended up with a negative balance there and the just would have refunded you.

      Definitely stay on top of FedLoan, try calling and talking to a different customer rep. Because that’s not fair to say you are delinquent when you have a perfect payment history, you were unable to make payments while it was being transferred.

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