American Education Services overview: What student loan borrowers need to know

American Education Services (AES) was established in 1963 by the Pennsylvania Higher Education Assistance Agency (PHEAA) to service private student loans and loans through the Federal Family Education Loan Program (FFELP). While the FFELP was discontinued in 2010, millions of these loans are still in repayment.

What is American Education Services?

The Pennsylvania Higher Education Assistance Agency established American Education Services to help service loans through the Federal Family Education Loan program. AES now services student loans from private lenders, as well.

As a loan servicer, AES doesn’t lend money to borrowers. Instead, it takes care of administrative tasks on behalf of lenders. Some of those tasks include collecting and processing student loan payments, helping borrowers change their payment plans, fielding questions and reporting payments to the credit bureaus.

Is American Education Services a federal student loan?

AES doesn’t actually lend money, so there is no American Education Services student loan. Its parent company, PHEAA, offers a private student loan called the PA Forward Loan.

AES helps borrowers manage their student loan payments. If AES services your loan, you can contact it to:

• Make regular student loan payments.
• Make extra payments toward the loan principal.
• Change payment due dates.
• Enroll in an income-driven repayment plan (available for federal student loans).
• Get help understanding how to qualify for federal student loan discharge and forgiveness programs.
• Enroll in hardship programs, such as deferment and forbearance.

Is American Education Services a good loan servicer?

As of 2024, there are over 8,200 complaints filed against American Education Services and its parent company PHEAA in the Consumer Financial Protection Bureau’s Complaint database. Of those, over 6,300 were closed with an explanation, over 1,700 were closed without monetary relief and just under 160 were closed with monetary relief.

Many of the complaints claim AES reported inaccurate payment information to the credit bureaus or report being dissatisfied with how the company handled payments. The majority of these complaints were addressed in a timely manner.

Unfortunately, you don’t have much say over which company services your student loans. When you take out the loan, your lender automatically assigns a servicer to your account. But if you’re dissatisfied with AES, you have two main options:

• Refinance your loans: You can refinance your student loans — both federal and private — to change your loan terms and switch loan servicers. Remember that if you refinance federal loans you’ll lose several important borrower protections in the process.
• Consolidate your loans: You can also use a process called loan consolidation, where you roll all of your federal student loans into a new federal Direct Loan. This may increase your interest rate, but you’ll get a new loan servicer.

Lawsuits against American Education Services

PHEAA has also been involved in class-action lawsuits. The company agreed to settle a class-action lawsuit in February 2021 that alleged it:

• Mistreated student loan borrowers by deliberately extending their repayment terms.
• Converted some grants into loans.
• Made processing errors that prevented some students from having their loans forgiven or lowered.

In May 2024 the company also agreed to pay $1.75 million to settle a CFPB lawsuit that alleged that it ignored and mishandled relief requests from student loan borrowers. These included some made during the COVID-19 pandemic. Lawsuits aren’t necessarily a sign that a servicer is good or bad, but it is wise to pay attention to lawsuits in case they apply to you and what you need from your loan servicer.

What types of student loans does American Education Services service?

American Education Services handles private student loans and student loans through the Federal Family Education Loan Program. Federal student loans made after 2010 will not be serviced by American Education Services — the FFELP stopped in 2010.

How do I know if American Education Services is my loan servicer?

To find out who your federal student loan servicer is, you can contact the Federal Student Aid Information Center at 800-433-3243. Alternatively, you can log in to your federal student aid account and navigate to your account dashboard. Here you will find your loan servicers listed under the “My Loan Servicers” section.

If you have private loans, the easiest way to find your loan servicer is to check your credit reports. All of your loan servicers will be listed there.

How to make American Education Services payments

AES provides a number of ways to make payments. You can also specify how you want your payments to be applied. To make payments:

• Send a check via mail.
• Call and pay over the phone.
• Use the mobile app.
• Use your online account.
• Sign up for monthly autopay.

Bottom line

American Education Services offers several ways to manage your account and make payments on your federal or private loans. If you’ve had trouble with the servicer, you can refinance or consolidate your student loan. These options come with consequences, so consider these carefully before making any changes.