If you have federal student loans, you — like millions of other borrowers — may be having your loans serviced by AES-PHEAA, possibly under the name FedLoan.
Too many names and acronyms? We hear you, and we'll explain.
Each federal loan is assigned to a servicing company for management and collection – and borrowers don’t get to choose which one. So even though you took out your loans from the U.S. Department of Education (DOE), that’s not where you send your payments after you graduate.
The DOE vets loan servicing companies based on how successful they are at collecting the loans and at satisfying their customers. The chosen companies function as the borrowers’ point of contact for everything from making payments to applying for loan forgiveness.
The largest of these loan servicers is a firm with an unwieldy acronym for a name: AES-PHEAA. Here’s what you need to know about what all those letters stand for, and how FedLoan specifically manages loans.
FedLoan and AES (American Education Services) are both owned by parent group PHEAA (the Pennsylvania Higher Education Assistance Agency).
PHEAA was founded in 1963 to manage loans granted through the Federal Family Education Loan Program. It started with a small portfolio of about 5,000 loans in 1964. Today, FedLoan and AES handle about 27% of the DOE’s direct loans, serving over 8 million borrowers with debt totaling more than $300 billion.
FedLoan is a newer offshoot of PHEAA, created in 2009 during a period of restructuring. Unlike many other federal student loan servicers, PHEAA is not a publicly traded company. It's a nonprofit quasi-governmental agency.
Now that you have a bit of background, let's get down to what having FedLoan as a servicer means for you.
If you have a student loan assigned to FedLoan, you'll hear from the company on a regular basis, starting while you’re still in school. Since they're managing loans on behalf of the DOE, they're in charge of quite a few things that may become important to you:
Most borrowers interact with FedLoan through its online portal. There, you can:
A bit of bad news: Like many other federal loan servicers, FedLoan has been the subject of numerous consumer complaints, but don't despair. The entire servicing industry has been trying to improve users’ experiences in the wake of unflattering reports and heightened federal scrutiny.
FedLoan has a few educational perks on its website, including:
FedLoan also shares a companion site with sister company AES called “You Can Deal With It” that has budgeting and money management tips for college students and recent grads.
If you want to be the first to know anything FedLoan-related, you can follow them on Twitter. And of course, you can reach their customer service support team with the usual methods —chatting online, calling, or e-mailing questions.
When it comes to federal student loans, servicers don’t have much say in the repayment plans they offer. The list is dictated by the DOE. So like all of the other servicers, FedLoan offers the following prescribed set of repayment options:
To make sense of all the different plans, FedLoan has a “repayment schedule estimator” tool at the bottom of the page where they are described.
If you’re having trouble making payments on your FedLoan-serviced loan, don’t ignore the problem.
Most borrowers should contact FedLoan immediately, and they can offer a few specific remedies to keep you in good standing and help prevent your loan from falling into default:
A word of caution, though: While these measures may help ease your stress in the short term, most will keep you in debt longer and increase the total amount of interest you’ll pay.
Servicers like FedLoan can’t do the one thing that is most helpful for struggling borrowers: lowering your interest rate.
For some borrowers, applying for deferment or forbearance — or even switching to a different repayment plan — helps in the short-term but can create worse financial issues in the future. Defaulting is the scariest of these, but even finding that you've been consistently making payments without making progress can be a major financial blow.
Many people with FedLoan-serviced debt have been able to negotiate much better terms by refinancing their student loans with private lenders. Refinancing is especially beneficial for those who took out their loans before 2014 and are paying more than 4% interest.
In a recent analysis we found that people who refinanced with private lenders saved an average of $253 a month and $16,183 over the life of their student loans. If you have more than one student loan, you can also consolidate them into a single monthly bill, making it easier to keep track of your payments and monitor your progress toward financial freedom.
The private student lending industry has responded to widespread borrower frustration with a surge of innovation. As a result, it’s easier than ever to find out if refinancing or consolidation can save you money.
Most online applications take less than 5 minutes, with no impact to your credit score.
Curious about whether you could be getting a better deal on your student loans? Find out now with the highly-rated lenders listed at the bottom of the page.
Office Hours: M-F: 8:00 AM - 9:00 PM (EST)
P.O. Box 69184
Harrisburg, PA 17106-9184
Earnest empowers people with the financial captial they need to live better lives.
Using technology, data, and design to build affordable products, Earnest's lending products are built for a new generation seeking to reach life's milestones. The company understands every applicant's unique financial story to offer the lowest possible rates and radically flexible loan options for living life.
Click here to apply with Earnest and to see how much you can save.
Operates in all 50 states; 2nd largest student loan refinancing lender
Laurel Road is a national online lender with customers in all 50 states, the District of Columbia, and Puerto Rico. Many of our non-bank competitors are not able to lend in all 50 states.Laurel Road has grown to be the second largest player in the student loan refinancing space in large part because of our reputation as the go-to low rate provider.
For every loan they fund, they contribute to the education of a child in need
CommonBond was founded in 2011 by three MBA graduates from the University of Pennsylvania’s Wharton School who wanted to help their peers escape from high-interest student loan debt. Its original focus was on grad students, but it has since expanded to cover undergrads as well.
Of all the companies we reviewed, CommonBond has some of the best customer service. The company prides itself on being easy to reach by email, phone, or live chat. It offers networking events, expert panels, insider newsletters, and even has a program help borrowers who lose their jobs to find new ones. CommonBond also makes you feel good about choosing to refinance with them by donating money to an education nonprofit for each loan they write.
Get a personalized review of your refinancing options with CommonBond today.
Credible is an online marketplace that provides borrowers with competitive, personalized loan offers from multiple, vetted lenders in real time.
Credible is a multi-lender marketplace that empowers consumers to discover student loan refinancing options that are the best fit for their unique circumstances. Our integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options ― without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivaled customer experience, as reflected by over 2,000 positive Trustpilot reviews and a TrustScore of 9.5/10. Credible is headquartered in San Francisco, California.
For more information, click here to apply now with Credible.
Works with 300+ community lenders for higher approval chances
Connecting student borrowers to a network of over 300 community lenders with low interest rates. By partnering with these lenders, LendKey is able to give consumers direct access to the best rates available from the most borrower friendly institutions. As the servicer of all loans obtained through its platform, you can rest easy knowing your personal information will be safe and that the best customer service team will be ready to answer your questions from application until your final payment.
Many ELFI customers save hundreds per month month and thousands over the length of the loan term.
Education Loan Finance is designed to assist borrowers through consolidating outstanding education loans into one single loan that effectively lowers your costs of education and/or makes repayment very simple. Education Loan Finance - backed by the strength of SouthEast Bank - combines the benefits of traditional education loan refinancing with the superior products, service, and support found in the private market.
Check out their low rates today to see how much you can save.
Attractive Bonus and Referral Programs:
Special offers for medical resident and fellow refinance products
Splash Financial is a leader in student loan refinancing with new rates as low as 3.25% fixed APR which can save you tens of thousands of dollars over the life of your loans. No application or origination fees and no prepayment penalties. Splash Financial is in all 50 states and is intensely focused on customer service. Splash Financial is also one of the few companies that offers a great medical resident and fellow refinance product. You can check your rate with Splash in just minutes.
Click here to see more of Splash's offerings and to see how you can save money.
Offers unemployment protection and career/coaching/networking
SoFi, which stands for “Social Finance,” was created by a group of Stanford business students who found themselves with a mountain of debt after graduation. They set out to change the student loan industry and help borrowers like themselves to get lower interest rates. SoFi has some of the lowest interest rates and, unlike the other lenders we reviewed, it has no maximum amount you can finance. However, Nevada residents can’t currently refinance with SoFi. Minimum loan balances are higher in Arizona, Massachusetts and Pennsylvania due to state laws. Additional state restrictions may apply.