Congratulations! You’ve graduated from college and are ready to make a name for yourself. Now that the graduation parties and job interviews are over, there is an elephant in the room that needs tackling – your student loan repayment plan.
Let’s face it: Those student loans can really weigh you down. Unfortunately, paying them back is your new reality, so don’t wait until the last minute of your grace period to figure out how it all works.
When it comes to federal loans, if it hasn’t happened already, you’ll be assigned a servicing provider to handle your payments. One of the biggest student loan servicing companies is FedLoan.
Unless you refinance, you’ll be stuck with FedLoan Servicing for the next 10-20 years, so we might as well get the awkward introductions out of the way right now. Here’s everything you need to know about managing your student loans through the MyFedLoan platform.
What Is MyFedLoan?
MyFedLoan is the user platform for FedLoan Servicing, an organization run by the Pennsylvania Higher Education Assistance Agency. FedLoan is one of nine companies used by the government to service federal student loans nationally.
MyFedLoan handles student loans that fall within the William D. Ford Direct Loan Program. If you’ve taken out loans through the Direct Subsidized Loan, Direct Unsubsidized Loan, Direct PLUS Loan, or Direct Consolidation Loan, you may end up using the MyFedLoan platform to manage your loans. Also, if you plan taking advantage of the Public Service Loan Forgiveness Program (PSLF), then FedLoan Servicing will automatically be assigned to you as your loan service provider.
How to Set Up a MyFedLoan Account
You don’t need an account for your student loans while you are in school, but it may a good idea to create one anyway. Just because a payment isn’t due doesn’t mean that you should pay nothing toward your loan, even on a tight budget.
To create an account at MyFedLoan, simply navigate to their website. (You can also use their mobile app, which is available for both Android and iOS phones.) In the top left corner of the homepage, you’ll see a box labeled “Account Access.” Here, you’ll have the option either to sign in or create an account.
It’s really as simple as that.
Repayment Options Through MyFedLoan
When it comes to repaying your loans, MyFedLoan offers a number of different options, including:
- Standard Repayment: This is the quickest way to pay off loans and has a fixed monthly payment. The term is 10 years for unconsolidated loans, and 30 years for consolidated loans.
- Graduate Repayment: This 10-year term starts with lower monthly payments that increase every two years. This plan initially starts with monthly payments that satisfy interest only.
Are you having trouble keeping up with your loan repayment plan? You aren’t alone. Thankfully, MyFedLoan also makes several different repayment programs available that can help make your payments more manageable.
- Income Sensitive Repayment: This repayment plan is only for loans disbursed through the FFEL Program. Monthly payments are determined by your monthly gross income, but – at a minimum – you must cover the interest that accrues. Loan terms can be extended up to five years.
- PAYE: Monthly payments are determined according to income and family size. Loan payments are generally 10% of your income and loan forgiveness is granted after 20 years of qualifying payments.
- Income-Based Repayment: Monthly payments are generally 15% of your discretionary income and are based on your family size, as well. Payments are made for up to 25 years.
- Income-Contingent Repayment: On this Income-Driven Repayment plan, you either pay 20% of your discretionary income or the amount you would pay under a fixed repayment plan over 12 years – whichever is lower. Payments are made for up to 25 years.
- Extended Standard and Extended Graduate Repayment: In order to reduce your monthly payment, with these plans, loan terms are stretched out from a typical 10-year repayment plan for up to 25 years.
Common Complaints Against MyFedLoan
You would think that a company chosen by the government to handle student loan payments would be exceptionally reliable, right? Unfortunately, MyFedLoan is whacked with an “F” grade from the Better Business Bureau. Ouch.
The most common complaint is that payments are not processed correctly. This includes automatic direct payments. Making extra payments or applying extra payments to just one loan also seems to be a struggle. Allegedly, these problems have resulted in individuals being improperly cited as making late payments. In turn, borrowers have reportedly accrued additional interest, been tagged as having a “poor standing” with their loan, and experienced a drop in their credit score.
Others have complained that since going paperless, they have no past records of their student loan payments. Even more individuals have expressed concern over issues with the Public Service Loan Forgiveness (PSLF) and Teacher Education Assistance for College and Higher Education (TEACH) programs. The Washington Post reports, “The company is also facing a class-action lawsuit from teachers who claim their grants were erroneously converted. They accuse FedLoan of trying to turn a profit because servicing loans for the government is more lucrative than servicing grants.”
Resolving Issues with MyFedLoan
If you set up direct payment through MyFedLoan, expect it to take two full billing cycles to activate. While you wait, make sure the company is getting your payment on time.
Keep in mind that it seems to take FedLoan forever to process anything. So, always be diligent on your side of things and keep a record of what you submit. For example, borrowers on an Income-Driven Repayment plan have to re-certify their income each year. Do this as soon as possible and know that it can take months for MyFedLoan to actually process your uploaded paperwork.
Also, extra payments will be spread across your loan total unless you clarify what the payment is for. So, if you don’t say that the extra payment should be put toward your loan principal, they likely will apply the extra money toward your next payment. Be sure to spell everything out for them, and keep a record of proof that you did. If you are doing PSLF, never let your loan status go into pay-ahead status; this can mess up your qualifications for loan forgiveness.
When it comes to dealing with MyFedLoan, the squeaky wheel gets the grease! This may be especially important if you are enrolled in the PSLF program. Stay on top of your account, making sure you are placed in the right payment plan and that your payments are actually posting correctly. If you meet resistance or end up dealing with a rude clerk on one call, request to speak with a manager or call back at a different time. Remember to always keep track of the times you call and the person you talk to.
Yes, dealing with MyFedLoan can be a pain. Staying on top of things and requesting quick assistance with any issues is your best chance to have them handled properly.
When it comes to federal student loans, the Department of Education does not allow borrowers to choose their loan service provider nor do they allow them to switch. So, what can you do if you hate the servicer you’ve been assigned?
Essentially, you have two options – consolidating your student loans or refinancing them. Both options effectively allow you to choose a new servicer. With consolidation, you’ll end up paying the weighted average of your previous interest rates. When you refinance, you may be able to lock in a lower interest rate based on your creditworthiness. With that said, you’ll be required to move your loans to a private lender – which could cost you some federal benefits.
Also note that refinancing your loans before your grace period is over can cause you to lose your grace period and your loan repayment will start shortly after you refinance. Obviously, it’s important to proceed with caution before making any decisions.
With that said, here are three of the best options for refinancing your student loans:
Credible: With an A+ rating from the BBB, borrowers love Credible for excellent customer service and better rates. Here, you’ll be able to compare rates from multiple lenders all in one spot. You can even earn a $200 bonus when you refinance your loan with Credible after using our link. Learn more here.
SoFi: SoFi offers affordable rates and flexible terms for refinancing federal and private student loans. They also offer unemployment protection, which is a nice plus. So, if you lose your job through no fault of your own, loan payments can be paused initially for up to three months. (Over the life of your loan, you can pause it for up to 12 months.) SoFi also offers free resources for finding and landing a new job. Learn more here.
LendKey: LendKey gives borrowers the chance to refinance their student loans from a network of credit unions and community banks. They offer very competitive rates and no origination fees. Learn more here.
Common MyFedLoan FAQs
Q: How do I view my loan details?
A: Loan details through MyFedLoan are available online by accessing your account. The “Loan Details” option is under the left-side menu.
Q: What is MyFedLoan’s contact information?
A: For general inquiries, contact:
P.O. Box 69184
Harrisburg, PA 17106-9184
For credit disputes, use the following:
FedLoan Servicing Credit
P.O. Box 60610
Harrisburg, PA 17106-0610
When it comes to issues, we strongly advise you to call them rather than email them. This will get you better customer service. However, be sure to get any agreements made in writing. Their hours are Monday through Friday from 8 AM to 9 PM EST.
Q: What types of payment does MyFedLoan take?
A: There are several ways to pay your student loan, but the best way is through Direct Debit. Simply connect your checking account to your loan account, and payments are automatically taken out on the due date. With this option, you will never be late in paying your loan, and you qualify for a 0.25% interest rate reduction. You may also pay online, through the mobile app, by phone, check or money order, or third-party bill-pay services.
Q: What do I do after my grace period is over?
A: During your grace period (six months after graduation), you will receive a repayment obligation statement. This will provide all of the details for each of your loans, explain the type of repayment plan you are on, inform you of your interest rate, and detail how much you owe overall and each month.
Q: Can I change my due date?
A: Yes, you can change your due date as long as your payment is not late. With that said, you can’t change it right before your payment is due. (Nice try!)
Q: What if I miss a MyFedLoan payment?
A: MyFedLoan considers your loan delinquent the day after the due date. It is important to settle your account immediately to get back in good standing. If you are having issues paying your loan, be sure to call the lender before the due date for help. Missing payments will affect your credit score and becoming delinquent on payments for over 270 days will result in wage garnishment, tax refund withholding, and more.
Q: How do I get a loan verification letter?
A: If you need a statement from MyFedLoan for a mortgage or other loan, you can find the “Loan Verification Letter” option under “Loan Details.” Again, this is located under the left menu in the Account Details section.
Final Thoughts on MyFedLoan
Using the MyFedLoan platform is easy enough, but the common theme of issues experienced with FedLoan Servicing is extremely concerning. Unfortunately, if you plan to use an Income-Driven Repayment Plan or PSLF, then you are stuck with FedLoan. If not, you may want to consider refinancing or consolidating with another loan servicer or provider.
For more information, you can compare our top student loan refinancing rates for this month here.
Thanks for reading and good luck!