Did FedLoan Servicing go out of business?

No, FedLoan Servicing didn’t go out of business, but it did stop servicing federal student loans. In December 2022, FedLoan, operated by the Pennsylvania Higher Education Assistance Agency, chose not to renew its servicing contract with the Department of Education due to rising costs and the complexity of managing federal loans.

Who took over FedLoan servicing?

No company took over FedLoan Servicing itself, which is still part of the Pennsylvania Higher Education Assistance Agency. But FedLoan’s loans were transferred to other servicers. MOHELA primarily took over Public Service Loan Forgiveness accounts, while other loans were moved to Edfinancial, Aidvantage, and Nelnet.

Why Are Student Loan Servicers Dropping Out?

Student loan servicers are dropping out because of rising operational costs and increased complexity in managing federal loan programs. The Department of Education has also set higher standards for accountability and borrower support, making it harder for servicers to meet requirements. These challenges have led some servicers to exit the federal market.

Do I need to reapply for PSLF or TEACH Grants with my new servicer?

No, you don’t need to reapply for PSLF or TEACH Grants. Your progress and application details were transferred to your new servicer. But check your account on StudentAid.gov to ensure everything is accurate and up to date.

Was my forgiveness delayed because of the transition?

Yes, the transition did slow forgiveness processing for some borrowers, including those whose loans moved from MOHELA to StudentAid.gov. If you’re pursuing PSLF or the one-time account adjustment, check the PSLF tracker on StudentAid.gov or contact your servicer for updates.

Is my interest rate or repayment plan changing?

No, your interest rate, repayment plan, and loan terms remain the same after the transition. The Department of Education ensured these details stayed intact when your loans moved to a new servicer.

FedLoan Servicing: What Happened and What You Need to Know

FedLoan Servicing stopped handling federal loans in 2022, impacting millions of borrowers. Here’s what happened, who took over, and what to expect next.

By Stanley Tate · Reviewed by Stanley Tate

Updated May 6, 2026 · 5 min read

Quick Facts

FedLoan Servicing no longer manages federal student loans; it exited the market in December 2022 due to rising costs and complexity, which affected millions of borrowers.
Your loans have been transferred to a new servicer, with most PSLF loans going to MOHELA, and other accounts moving to servicers like Edfinancial, Aidvantage, and Nelnet.
To avoid any issues after the transfer, take a few proactive steps: update your contact information, confirm payment arrangements, and review your loan history with your new servicer.

Overview

If you’re searching for “FedLoan,” you’re likely trying to figure out what happened to your federal student loans. Here’s the deal: FedLoan Servicing shut down in 2022, and another student loan servicer now handles your account.

Your loans are still intact, and all your information is accessible. To check your servicer, loan details, or forgiveness progress, visit StudentAid.gov. The FedLoan portal is no longer active, but this centralized platform is now your go-to resource for managing your loans.

Feeling overwhelmed? Don’t worry—this article will guide you through everything you need to know.

What Was FedLoan Servicing’s Role in Federal Student Loans?

FedLoan Servicing was the sole servicer for federal loan forgiveness programs like Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness. It also managed federal student loan payments for about 8.5 million borrowers. This represented about roughly 20% of all federal student loan borrowers at the time. Its corporate name? The Pennsylvania Higher Education Assistance Agency (PHEAA)—but most people just called it FedLoan.

In 2021, PHEAA chose not to renew its contract with the U.S. Department of Education. Why? Because the federal student loan system is the most complex consumer loan product in the world.

With varying repayment plans, forgiveness programs full of technical trip wires, and strict rules that penalize even small mistakes, servicers are constantly under pressure. That pressure leads to lawsuits, negative complaints, and scrutiny from lawmakers—all of which made administering these loans too challenging and costly for PHEAA to continue.

FedLoan’s government contract ended in December 2022, and its operations shuttered. If FedLoan handled your loans, they’ve been transferred to another servicer, and your account details are intact.

Is “FedLoan” the Same as Federal Student Loans?

If you’re searching for “FedLoan,” you’re probably trying to figure out where your federal student loans are or what’s happening with them.

Or maybe you want to confirm your repayment plan, figure out which company is managing your loans now, or view your IDR Tracker to check on your IBR loan forgiveness progress.

Here’s what to do: Log into StudentAid.gov, the official site for Federal Student Aid. They’re the same thing—FSA runs the website, and it’s your central hub for everything related to your federal loans.

Once you have account access, you can:

Check your loan details.
See who your current loan servicer is.
Learn about forgiveness programs and repayment options.

Whatever you’re searching for, studentaid.gov is the best place to start.

Who Replaced FedLoan and Where Are My Loans Now?

When FedLoan Servicing closed its doors, the Education Department moved FedLoan borrowers to other servicers as part of the department’s reassignment plan. MOHELA took over loans tied to Public Service Loan Forgiveness (PSLF) and TEACH Grant programs. Later, the U.S. Department of Education assumed responsibility for managing these programs directly.

Although MOHELA still services the loans, it no longer tracks forgiveness progress or handles program details. If you’re pursuing PSLF or monitoring TEACH Grant status, you’ll need to log into studentaid.gov and use the PSLF tracker for updates.

Other loans previously managed by FedLoan were transferred to servicers like Aidvantage (formerly Navient), Nelnet, and Edfinancial. The Department of Education assigned loans to these servicers to ensure continuity, and your loan terms, balances, and access to income-driven repayment plans remain the same.

Why Did FedLoan Handle PSLF and TEACH Grants, and What Changed?

The Department of Education gave FedLoan exclusive contracts to manage PSLF in 2009 and TEACH Grants in 2012 because these programs required specialized servicing. But FedLoan faced significant performance issues, including improper TEACH Grant-to-loan conversions, miscounting PSLF payments, and providing inaccurate information. These problems led to lawsuits, borrower complaints, and growing scrutiny.

In 2021, FedLoan announced it would not renew its contract, citing the complexity and cost of managing federal programs. To address these long-standing issues, the Department of Education transitioned PSLF and TEACH Grant management to MOHELA and later centralized the programs under StudentAid.gov in 2024.

Next Gen FSA aimed to modernize federal loan servicing by creating a single platform for borrowers to manage loans, track forgiveness progress, and access clear, transparent information—without relying on third-party servicers. Centralizing these programs under StudentAid.gov was intended to simplify access, improve transparency, and increase accountability for borrowers.

What If I Have Questions About My FedLoan Account or Payments?

If you need old payment records to fix issues like your IDR tracker, PSLF progress, or interest accrual, here’s what to do:

Confirm Your Loan Details. Log into StudentAid.gov to see your current loan balance, servicer, a and repayment progress. These details were transferred when FedLoan shut down. To check your monthly payment or status of an IDR plan application? Reach out to your servicer.
What If There Are Errors? If payments or progress are missing, your servicer won’t have detailed records from FedLoan. Calling Federal Student Aid’s (FSA) Information Center likely won’t help either, as their representatives don’t have access to payment-level information. To get your original payment history, you’ll need to file a Freedom of Information Act (FOIA) request with the Department of Education.
Was My Payment History Transferred? Yes, your payment history and forgiveness progress were transferred. But only a summary—not detailed records—was provided to your new servicer. If something seems wrong, review your own records and act quickly to address discrepancies.

Bottom Line

FedLoan Servicing exited the federal student loan market due to rising costs and increasing complexities in loan management, transferring millions of borrower accounts to new servicers. This adjustment made borrowers worried about what would happen to their loans.

Fortunately, borrowers will only adjust for the new servicer (MOHELA, Edfinancial, Aidvantage, or Nelnet) while their interest rates and payment plans remain the same.

If you are having problems with your student loans, our team of student loan lawyers can always lend a hand. Book a call or sign up for our newsletter to get the latest insights on student loans.

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