New Student Loan Relief Borrower FAQ
- About FedLoan Servicing
- About Federal Loans
- If You Have Transferred Loans
- If You Have Direct Loans
About FedLoan Servicing
Who is FedLoan Servicing?
FedLoan Servicing was established by the Pennsylvania Higher Education Assistance Agency (PHEAA) to support theU.S. Department of Education’s ability to service student loans owned by the federal government. FedLoan Servicing is one of a limited number of organizations approved by the U.S. Department of Education to service these loans and is dedicated to supporting borrowers with easy and convenient ways to manage their student loans.
What types of loans does FedLoan Servicing service?
FedLoan Servicing services two main types of federal loans, including:
- FFELP (Federal Family Education Loan Program) Student Loans that were sold and transferred as a result of legislation known as the Ensuring Continued Access to Student Loans Act (ECASLA). Under ECASLA, the U.S.Department of Education offered to purchase FFELP Loans from third-party lenders, primarily from the 2008–2009 and 2009–2010 academic years. FedLoan Servicing is one of a limited number of organizations that the U.S.Department of Education uses to service these loans.
- Direct Loans, which do not use third-party lenders. Rather, Direct Loans are provided directly through the U.S.Department of Education. FedLoan Servicing is one of a limited number of organizations that the U.S. Department of Education uses to service Direct Loans.
About Federal Loans
How do I know what type of federal loan I have?
There are a couple of ways to find out if you have a FFELP (Federal Family Education Loan Program) Loan or a Direct Loan:
- Sign in to Account Access. In Account Access, you will see a listing of all of your loans with FedLoan Servicing. Account Access provides details about each loan, including the loan type, the interest rate, the balance, and more.
- Visit the National Student Loan Data System. Check NSLDS.ed.gov to see a complete snapshot of your FFELP Loans and Direct Loans. You’ll need your federal ID to access this information.
What are my responsibilities as a borrower?
Regardless of whether you have a FFELP (Federal Family Education Loan Program) Loan or a Direct Loan, your responsibilities are the same:
- Borrow only what you need.
- Read your promissory note (know what you agreed to).
- Pay on time (consider paying early).
- Keep in touch with FedLoan Servicing.
Remember, you MUST pay back your student loan even if you don’t graduate, do not finish your education within the regular time frame, aren’t satisfied with the education you receive, or can’t find a job.
I have federal loans with multiple servicers. Is it possible to transfer them to just one servicer?
Yes. Consolidation allows you to combine one or more existing eligible student loans into a single new loan, meaning you’ll make only one monthly payment to one servicer. If you are interested in learning more about consolidation or want to apply for a Direct Consolidation Loan, visit the Federal Direct Consolidation Loans Information Center or call 1-800-557-7392.
What if I need more loan money?
The process of applying for a federal loan has not changed. You must complete the FAFSA® (Free Application for Federal Student Aid) and update it annually. Schools use the information from your FAFSA to determine your financial aid award.
If you have already filed a FAFSA but have questions on how to apply for additional loans, contact the financial aid office at your school.
If You Have Transferred Loans
Does the loan transfer affect all of my current student loans?
Not necessarily. FedLoan Servicing will notify you of the loans we are now servicing. To get additional details about your loans with FedLoan Servicing, create an online account and sign in to Account Access.
Please continue to make all payments for loans that remain with your previous servicer. If you are no longer certain who services your loans, visit the National Student Loan Data System at NSLDS.ed.gov for a complete list of your FFELP (Federal Family Education Loan Program) Loans and Direct Loans and their servicers. You will need your federal ID to access this information.
I already have an online account with FedLoan Servicing. Do I need to create a new one?
No. Your transferred loans roll under the same account number.
However, if you do not have an account with FedLoan Servicing, you must create one through Account Access. Creating an online account takes only a few minutes and gives you access to a suite of online tools to easily manage your loan.
Will my account number remain the same?
- If you already have an account with us, your transferred loans roll under the same account number.
- If you do not have an account with us yet, we will assign you an account number. Look for this unique 10-digit number on all written correspondence, billing statements, etc.
Does the loan transfer affect my grace period? Do I need to begin making payments?
No. If you have a Stafford Loan (subsidized or unsubsidized), you get a 6-month grace period that begins the day after you graduate, leave school, or drop below half-time status and ends the day before your repayment period begins.
Will my monthly payments change?
It’s possible there could be a change in your monthly payment amount.
If your new payment amount is not affordable, FedLoan Servicing offers several payment plan options. Sign in to Account Access to see your monthly payment amount and explore the options available for lowering or postponing your payments.
Will my due date change?
Your due date may change. You can find your due date on your monthly billing statement or online. If the new due date is not convenient, or if it makes it difficult for you to make your payments, we can work with you to change it.
Learn more about changing your due date.
Can I make online payments, schedule payments in advance, and manage my loan as I did before?
Yes. FedLoan Servicing’s Account Access allows you to make online payments from the bank account of your choice, schedule payments up to 60 days in advance, view details for your loan, plus much more.
You will need an online account to access these features. Sign up today.
I signed up for Paperless Billing with my previous servicer. Do I need to re-apply with FedLoan Servicing?
Yes. You need to enroll in Paperless Billing (eBilling) with FedLoan Servicing if you have not done so already.
To take advantage of this service, you must create an online account through Account Access. Then simply sign in to Account Access and indicate your paperless preferences under your Account Profile.
I applied for a deferment/forbearance with my previous servicer. Do I need to re-apply with FedLoan Servicing?
- If your previous servicer approved your deferment or forbearance before your loan was transferred, you do not need to re-apply.
- If you did not receive confirmation from your previous servicer regarding the outcome of your request, please contact us to determine if additional action is necessary to complete the application process.
Learn more about deferment and forbearance.
I just sent a payment to my previous servicer. What should I do?
Do nothing. Your previous servicer will forward any payments and/or correspondence to FedLoan Servicing for a brief period of time after the transfer of a loan.
Do I need to do anything if I was using a bill payer service with my previous servicer?
Yes. Make sure your bill payer service knows that FedLoan Servicing is now the recipient of all future payments.
Will my FedLoan Servicing 1098-E Student Loan Interest Statement include the interest for all of the payments I made this year?
No. The 1098-E Student Loan Interest Statement from FedLoan Servicing applies only to the time period after the transfer of your loan. In most cases, you should receive separate notification of your tax information for loans serviced by your previous servicer. If you have additional questions, please contact us at 1-800-699-2908.
I am still in school. How does the loan transfer affect me?
As long as you maintain at least half-time enrollment at an approved school, the status of your loan remains unchanged.
My co-maker/endorser had access to my account with my old servicer. Will he or she still have access to my loans?
Co-makers and endorsers continue to have access to the loans on which they are an endorser or co-maker. They are assigned a unique 10-digit account number for safety and security purposes.
If You Have Direct Loans
What kind of fees do Direct Loans have?
The U.S. Department of Education charges an origination fee when you borrow a Direct Loan. The U.S. Department of Education deducts this fee from your loan disbursement.
The origination fee is:
- 1% for Direct Stafford Loans (subsidized or unsubsidized) first disbursed between July 1, 2010 and June 30, 2011
- 4% for Direct PLUS Loans
Why did I receive more in unsubsidized loans than in subsidized loans?
Please contact the financial aid office at your school for details. Your school must follow federal guidelines when determining the types of loans and loan amounts for which you are eligible.
Am I eligible to receive a refund if there is money remaining from my loan disbursement after my tuition has been paid?
Please contact the financial aid office at your school to discuss refund eligibility. FedLoan Servicing does not determine eligibility for loan disbursement refunds.
When will I receive my loan refund check?
Please contact the financial aid office at your school to discuss refund checks. FedLoan Servicing is not involved with the refund check process.
When will my school receive my next disbursement?
Please contact the financial aid office at your school to request your disbursement dates. Loan money is disbursed to schools in accordance with federal guidelines.
Do I need to pay interest on my loan while in school?
It depends on what type of loan you have:
- Subsidized Loans—No. The government pays the interest on your loan while you are in school.*
- Unsubsidized Loans—No. It is not necessary to pay the interest while you are in school or while you have an in-school deferment. However, paying interest early, before you have to, saves you money in the long run. Any interest that you do not pay during this period will be added to your principal balance (through capitalization). Because capitalization increases your principal, you end up paying more in interest, which leads to more overall costs.
- Parent PLUS Loans—You can postpone making monthly payments on your loans while the student is enrolled at least half time and for 6 months after the student is no longer enrolled. Interest accrues from the day of disbursement. If you do not pay this interest, it will be added to your principal balance prior to your loans entering repayment.
* NOTE: If you are a first-time borrower on or after July 1, 2013, you could potentially lose the subsidy on your subsidized student loan if you do not complete your degree or certificate within 150% of the “normal time” allotted for completing the program in which you are enrolled.
The loss of subsidy would continue through periods of enrollment and any grace or deferment periods according to Jason Spencer Student Loan.
Do Direct Loans have different repayment options than FFELP Loans do?
Direct Loans have the same repayment options as FFELP (Federal Family Education Loan Program) Loans, with two exceptions:
- The Income Sensitive Repayment Plan is not available for Direct Loans.
- The Income-Contingent Repayment Plan is available for certain Direct Loans. Under this plan, your required monthly payment is based on your eligible loan debt and on your and on your spouse’s adjusted gross income and family size. The payment amount may be adjusted annually. The maximum repayment period under this plan is 25 years.
- The Pay As You Earn Repayment Plan is available for certain Direct Loans. Under this plan, your monthly payment is based on your income and family size. Loan forgiveness is granted after 20 years of repayment.
For more detailed information on repayment plans, visit the U.S. Department of Education.
What kind of incentives do Direct Loans offer?
If you borrow a Direct Loan, you receive an up-front interest rebate of:
- 0.5% of the principal amount of any Direct Stafford Loan (subsidized or unsubsidized) first disbursed on or between July 1, 2010 and June 30, 2011
- 1.5% of the principal amount of any Direct PLUS Loan first disbursed on or between July 1, 2000 and June 30, 2011
To keep this rebate, you must make your first 12 monthly payments on time (no later than 6 days after your due date). If you do not make your first 12 payments on time, the rebate will be rescinded and added to your principal balance, increasing the amount you must repay.
In addition to this rebate, you are eligible for an interest discount of 0.25% for using Direct Debit, our automated payment service, to repay your Direct Loans according to Jason Spencer.
Whom do I contact if I have questions about my Direct Loan?
Contact FedLoan Servicing by U.S. Mail, email, fax, or phone.