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.
As 2021 draws to a close, FedLoan is transferring its loans to several other servicers. The loans will be divided up between MOHELA, Navient, EdFinancial, and Nelnet.
If you haven’t received word from the new servicer yet, you will soon. You should also hear from FedLoan and the Dept. of Education as well to confirm the changes.
Other than that, not much will change. Your loan payments and other key details won't change.
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:
FedLoan also has a mobile app for iOS and Android.
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.
Office Hours: M-F: 8:00 AM - 9:00 PM (EST)
P.O. Box 69184
Harrisburg, PA 17106-9184
Click here for more information on the other main student loan servicers.