What to expect – Forbes Advisor


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If your federal student loans are administered by FedLoan Servicing, a big change is afoot. FedLoan Servicing has terminated its contract with the U.S. Department of Education, and all current FedLoan borrowers will transition to new student loan servicers by the end of 2022.

You will likely receive communications from the Department of Education, FedLoan, and your new loan manager, if you haven’t already, explaining the update. None of the terms of your loans will change, but you will need to make payments to a new business, and it is crucial to do so as soon as you are required to. This way you won’t miss a payment or be late.

Keep in mind, however, that the coronavirus payment pause is still in effect until August 31, 2022. You are not required to make any payments until then, even if your repairer changes. Here’s what to expect.

What changes with the FedLoan service?

Companies that handle federal student loan repayment on behalf of the government enter into contracts with the Department of Education. Sometimes these contracts end or the government reassigns borrowers to different managers based on the programs the borrowers have enrolled in.

When this happens, the government transfers your loans to a new managing agent. You may have already experienced a transfer of service as a student loan borrower; most of the time everything goes well. In this case, since FedLoan will no longer oversee federal student loans, borrowers will be transferred to one of the following services: MOHELA, Aidvantage, Edfinancial or Nelnet. All transfers are expected to be completed by December 2022, according to FedLoan.

How will PSLF and TEACH borrowers be affected?

FedLoan Servicing was formerly the exclusive administrator of loans repaid under the Civil Service Loan Forgiveness Program and grants received under the Teacher Education Assistance for College and Higher Education (TEACH) grant program.

The Ministry of Education has announced that MOHELA will be the new point of contact for participants in these programs. Switching from FedLoan to MOHELA will likely happen for you later in 2022, according to the department, but you can check the status of your loan or grant transfer on the MOHELA website. There will be no other changes to your loans or grants.

MOHELA also indicates that if you have previously used autopay to make payments to FedLoan, your information will automatically transfer and you will not have to re-enroll for autopay with MOHELA.

What happens when your loan is transferred

You will probably receive a first email, letter or both announcing the transfer, with the contact details of your new repairer, around 15 days before the transfer begins. You will then receive an update from the new repairer indicating that the transfer has been finalized, usually about 10 days after its effective date. The repairer will tell you from what date you need to start making payments to the company.

Your loan details will likely be available on the new servicer’s website about two or three days after you receive an update that the transfer is complete. Payments or requests that were in progress before the transition should be seamlessly transferred to your new service. But it’s a good idea to check that everything is up to date on your new account when it’s ready.

If your loan is transferred before August 31, 2022, you will continue to benefit from the coronavirus forbearance and 0% interest rate until they expire. But when it’s time to make payments again, you’ll make them to your new repairer.

How to ensure a smooth transition

Follow these steps to prepare for a successful transition away from FedLoan:

  • Make sure FedLoan has your updated email address and mailing address so they can contact you about the transfer.
  • Check your inbox and mailbox regularly, including your spam folder, so you don’t miss any messages.
  • Once you’ve received the initial communication about a transfer, you’ll likely already be able to create an online account with the new repairer.
  • When creating your account, make sure the new company has your current contact details and check where your loans are in the transfer process.
  • If you use an automatic bill payment service through your bank to make payments, provide your bank or bill payment administrator with the name and address of your new service and your new account number. Be sure to do this as soon as you receive confirmation that the transfer is complete.
  • If your loans are part of a special program like PSLF, double-check after the transfer that all your data and loan status have been transmitted correctly.
  • If you notice a problem after your loan details become available on your new servicer’s website, contact them immediately and have your exact loan information ready if they have any questions.

How to reach FedLoan customer service

If you want to get in touch with FedLoan before or during the transfer, here’s how to do it:

  • Call 1-800-699-2908 Monday through Friday between 8:00 a.m. and 9:00 p.m. ET
  • Send email when logged into your account


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