FedLoan Servicing is a legitimate company connected to the Pennsylvania Higher Education Assistance Agency (PHEAA). FedLoan Servicing is among the eight companies offering federal student loan collection and tracking services. It is the only student loan servicer managing Public Student Loan Forgiveness (PSLF) program applications.
You might ask, “Is FedLoan Servicing a scam?” because of the organization’s poor reputation in servicing student loans. There were more than 760 complaints against FedLoan Servicing in the Consumer Complaint Database between December 2018 and December 2021. This blog highlights the different issues you can expect from FedLoan Servicing based on consumer complaints.
Issues With FedLoan Servicing
As of December 13th, 2021, many respondents have complained about FedLoan Servicing about its services, including:
- Dealing With the Servicer: 597 people have reported having received bad information about their loan terms or balance, trouble with the handling of their payments, problems with customer service, and disagreements with their charged fees.
- Incorrect Information on Report: 73 people complained about having incorrect account status and information. There were cases where people had information on their accounts that belonged to other people. Other people also reported that there was old information on their account that was no longer relevant.
- Credit Reporting Issues: 34 people reported problems with a credit reporting company’s investigation into their accounts. These FedLoan Servicing users had problems with personal statements of dispute, not receiving updates regarding their account investigation status, untimely investigation services, submitting their disputes, and getting information for their account. For the most part, people reported that investigations did not resolve their issues.
- Lack of Payment Options: 31 people reported having trouble repaying their loans. Perhaps there were no flexible student loan repayment options that suited their situation. These people also reported having problems lowering their monthly payments and having no option to temporarily delay their payments.
- False Representation: 11 people had experiences with FedLoan Servicing where there was an attempt to collect the wrong amount of money due. One of these people reported that there was impersonation involved, where someone pretended to be an attorney, government official, or member of law enforcement regarding their account.
Avoid Student Loan Scams
Be sure to look into any company claiming to help you with your student loan status before dealing with them in any way. Consider how FedLoan Servicing has a bad reputation with their service. People would search for this company online and then read all about their issues. However, the company is still legitimate despite these problems due to their affiliation with an official organization (PHEAA).
Here are some warnings that can give away whether a student loan company is legitimate or a scam:
- Grammatical errors in their messages
- Unrealistic promises about student loan forgiveness
- Charges you for their services
- Insists on getting your account information
So, Is FedLoan Servicing Legitimate?
FedLoan Servicing is a legitimate service but has a reputation for poor customer service making people believe it is a scam. It is only right to be skeptical about student loan servicers claiming to offer help regarding your student loans. Consider seeking assistance from a student loan consultant if you remain skeptical about a company’s legitimacy.