Is Fedloan Gone?

The burning question is: Is Fedloan gone? Yes, and understanding what happened is crucial for managing your student loans effectively.

Fedloan Servicing was a well-known (and sometimes irritating) name among many federal student loan borrowers. But recently, when you tried to log in to your MyFedloan account, there might be an unexpected issue.

This blog contains everything you must know about the transfer of Student Loan Servicing.

What Happened to MyFedloan?

Let’s jump into: Is Fedloan gone? The contract between Federal Loan Servicing and the Department of Education for servicing federal student loans expired in December 2022, which means that all federal student loans are no longer managed by them.

Why the Change? Several reasons can cause a loan servicer changeover, such as:

• Contract Expiration: Loan servicers operate under contracts with the ED. When one ends, the ED may renew it, assign the loans to another servicer, or even split up its load among more than one servicer.
• Performance Issues: Sometimes a servicer may not meet the standards the ED has set forth, leading to a contract termination and loan transfer.

Timeline of Events:

• June 2022: The ED announced that Fedloan’s contract wouldn’t be renewed and that borrowers would be transferred to new servicers.
• August – December 2022: Borrowers received multiple notifications from Fedloan, the ED, and their new servicers about the transfer process.
• December 2022: All Fedloan accounts were successfully transitioned to new servicers.

Impact on Borrowers

The good news is that your loans haven’t disappeared! They’ve just been moved to another servicer. Here’s what you should expect:

• New Servicer Notification: Your new servicer should have sent you several emails or letters explaining how to access your account, payment choices, and other important updates.
• Account Access: To manage your loan details, make payments, or update your contact information, you need to create a new online account with your new loan provider. Don’t attempt to use old Fedloan login credentials!
• Review Your Loan Details: As part of this process, make sure you take some time familiarizing yourself with the platform of your new service provider and verify all the necessary information about your loan, including current balance, interest rate, repayment plan among others as well as keep an eye on upcoming due dates.

Taking Action: Here are some key steps after the transfer:

• Update Your Contact Information: Make sure that any changes in terms of email address, phone number, etc., are relayed to the borrower in order for them not to miss any important news from their service providers through contacting them, for example via emails.
• Set Up Automatic Payments: In case you had previously enrolled in Fedloan’s autopay, then with your new servicer, you will need to re-enroll and make sure that the payments are not disrupted.
• Review Your Repayment Plan: Ensure that you still have active enrollment on an IDR plan or PSLF on your new service provider and that all qualifying payments were properly documented.

Remember: The transfer process should not obstruct your progress towards loan forgiveness under any IDR plan or PSLF. However, this is one of those situations where double-checking with your new servicer can never hurt.

These steps will assist in making a seamless transition in ensuring effective management of student loans.

Who is Taking Over the Role of Fedloan?

As you know the asnwer to: Is Fedloan gone? now let’s talk about who is taking over Fedloan. After Fedloan was removed, your loans were reassigned by the Department of Education under one of these servicers:

• MOHELA: This non-profit organization has taken over much of the transferred debt including those that were on income-driven repayment plans.
• Aidvantage: Previously Navient, this other major company ended up with a lot of accounts that belonged to Fedloan.
• Edfinancial: They focus on student loans from particular schools and programs and nothing else.
• Nelnet: The final one in this group is Nelnet, another established servicer who took part of the portfolio from Fedloan.

Though the specific processor will be dependent upon your loan particulars, all are performing essentially the same role: administering federal student loans on behalf of DOE. They ensure that you remit all payments as required, assist when subscribing for IDR plans and PSLF, and give updates about your student loan status.

How to Manage Your Student Loans During the Transition?

The answer to the question: Is Fedloan gone? is Yes. but now the question arise how to make transition to new provider? Here’s a checklist to help you navigate this change:

1. Locate Your New Servicer Notification: Look in your inbox or postal mail for correspondence from the new servicer. These contain important details that will let you access your account and handle your student loans. 2. Create a New Account: Visit their site and create an online profile on the system of the current servicer. The old Fedloan login credentials should not be tried here! 3. Review Your Loan Details: Once inside, check out some things about it including; your balance, interest rate, repayment plan, due dates, etc. 4. Update Contact Information: Ensure that all the latest contacts (including email addresses and telephone numbers) are given to the new servicer for receiving key updates and also avoiding missed payments. 5. Re-enroll in Autopay (Optional): If you had automatic payments set up through FedLoan, reapply to your new student loan servicer to prevent gaps in payment. 6. Confirm IDR Plan/PSLF Status (if applicable): In case you are on an IDR plan or pursuing PSLF, make sure that you speak with your new servicer so as to confirm that you are still enrolled in these programs as well as ensuring Fedloan has made valid qualifying payments for them. 7. Staying Informed During the Transition: Staying informed during the transition is vital.

These steps will assist in making a seamless transition and ensuring effective management of student loans.

Additional Resources: Don’t Be Afraid to Ask for Help

• Financial Aid Office: The office responsible for student loans at your school can help guide you through repayment options and explain what it means when a student debt changes hand.
• Consumer Financial Protection Bureau (CFPB): Visit https://www.consumerfinance.gov/ or call (855) 411-CFPB (2372). The CFPB website provides resources and tools that let you understand your rights as a borrower and manage your student loan portfolio.
• Online Support Groups: Online forums or communities where student loan borrowers can connect with each other can help provide some insights and support, especially during the transition period.

Conclusion

In summary, Is Fedloan gone? Yes, understanding this transition is crucial for managing your student loans. The expiration of Fedloan’s contract with the Department of Education led to loans being reassigned to new servicers: MOHELA, Aidvantage, Edfinancial, and Nelnet.

Stay proactive by creating a new account with your servicer, updating your contact information, re-enrolling in autopay, and verifying your enrollment in IDR plans or PSLF. This will ensure a smooth transition and uninterrupted progress towards loan repayment or forgiveness. For further assistance, contact your new servicer or refer to official Department of Education resources.