by
Senior Writer
EdFinancial is a federal student loan servicer that works with the U.S. Department of Education to manage and process federal student loans. EdFinancial has been in the student loan industry for more than 30 years.
Headquartered in Knoxville, Tennessee, EdFinancial is one of eight student loan servicers who partner with the federal government. The other servicers include Aidvantage (formerly Navient), FedLoan Servicing, Great Lakes, MOHELA, Nelnet, ECSI and OSLA. 
Who handles student loans once repayment begins can be confusing because the company that services your student loan didn’t give you the loan. You might even have multiple companies assigned to service your student loans if you have more than one loan.
But the federal government is the lender behind all federal student loans, regardless of where you make payments. Because of the time and expense, the government outsources the administration of those loans to eight student loan servicers — one of which is EdFinancial.
Student loan servicers like EdFinancial are responsible for:
Like other servicers, EdFinancial has also seen its share of controversy. In March 2022, the Consumer Financial Protection Bureau sanctioned and fined EdFinancial for lying to borrowers and misrepresenting loan forgiveness and repayment options.
The bureau ordered EdFinancial to contact all affected borrowers, provide accurate information about their accounts and pay a $1 million civil penalty.
Some of the features EdFinancial offers its customers include:
If you sign up for KwikPay — EdFinancial’s auto debit option — while your account is in active repayment, you receive an interest rate reduction of .25% on your student loans. The debit option automatically pulls your monthly student loan payment from a checking or savings account that you designate.
If you’re struggling to make your payments, EdFinancial offers forbearance and deferment, which are temporary suspensions of repayment. If you qualify for deferment, your loan interest is paid by the federal government. If you don’t qualify for deferment, you can choose the forbearance option, though your loans continue to accrue interest.
EdFinancial offers a wide range of benefits for military service members who are making student loan payments, including interest rate caps, deferment and forbearance options and possible forgiveness through the Public Service Loan Forgiveness program. EdFinancial also has liaisons who work exclusively with service members to manage their student loans.
If you have several student loans, you have the option to combine them into one monthly payment and one interest rate using a direct consolidation loan. You can apply through the U.S. Department of Education at no cost. If approved, EdFinancial could be appointed as your student loan servicer.
EdFinancial offers a wide range of payment methods for its borrowers including:
Co-signers also have the option of paying student loans by mail, online or via phone.
There are several repayment options available on federal student loans. The standard repayment plan for federal loans is a maximum of 10 years with a fixed monthly payment of no less than $50. As a federal student loan servicer, EdFinancial offers the following.
The REPAYE program allows financially strapped borrowers to continue making payments and reduce their student loan debt. Payments are based on your discretionary income, which the federal government defines as “10% of the difference between your adjusted gross income, and 150% of the poverty line amount for your family size and state.” Payments are adjusted annually and your total loan balance can be forgiven after 20 to 25 years of repayment.
This PAYE program is for individuals with high debt compared to their income. It offers the same terms for discretionary income (10%) and forgiveness (20-25 years), but payments will never exceed what they would be under the standard repayment plan. With a lower payment, you’ll pay more over the life of the loan and accrue more interest.
Income-based repayment plans are for borrowers with high income-to-debt ratios. They offer lower payments than the standard plan but more than with the PAYE or REPAYE plans — anywhere from 10% to 15% of discretionary income. The IBR plan helps keep payments manageable, but you will pay more interest over the life of the loan. Payments are adjusted annually based on family size and income and any outstanding balance is forgiven after 20 to 25 years.
The income-contingent repayment plan helps you repay your student loans faster as your income grows. It has higher monthly payments that are either 20% of your discretionary income or the income-adjusted amount you would pay for a 12-year fixed loan, whichever is less. ICR monthly payments are higher than payments on the standard plan and the balance can also be forgiven after 25 years.
Other repayment options include:
You don’t get to choose who services your student loans  — the U.S. Department of Education does that. Still, it’s good to know as much as you can about your servicer, including payment options and what others have experienced.
We’ve answered some of the most common questions that people ask about EdFinancial Services.

Yes, EdFinancial Services is one of eight student loan servicers selected by the U.S. Department of Education to manage federal student loans. This involves communicating with borrowers about payments, payment options, forbearance and deferment options and more.
EdFinancial doesn’t grant loans but does manage repayment on student loans offered by the U.S. Department of Education. EdFinancial handles various federal student loans, including direct loans to students and parents and consolidation loans.
You may know if EdFinancial is servicing your student loans from exit counseling or receiving a bill. If you don’t know who is servicing your loans, you can find out by calling the Federal Student Aid Information Center at 1-800-433-3243. You can also check online through the National Student Loan Data System.
Yes, EdFinancial is a legitimate student loan servicer listed with the U.S. Department of Education. Though sanctioned and fined for deceptive practices, EdFinancial is still one of eight student loan servicers through the federal government and has been in business for 30 years.
EdFinancial Services is not known for exceptional service on federal student loans. EdFinancial has a reputation for poor customer service and was sanctioned and fined in 2022 for deceptive practices. The Consumer Financial Protection Bureau ordered EdFinancial to pay a $1 million civil penalty for lying to borrowers.
EdFinancial is a student loan servicer for the federal government. While one responsibility is collecting on overdue student loan payments, EdFinancial is not exclusively a collection agency.

Robert Bruce is a senior writer for The Penny Hoarder.
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