FedLoan student loan call center in Chester closing next year, axed in cost-saving measure

FedLoan and AES service student borrowers speak with call center employees at PHEAA headquarters in Harrisburg. Image via Keith New.

Budget cuts are bringing an end to a student loan service call center in Chester, writes Erin Arvedlund and Bob Fernandez for The Philadelphia Inquirer.

FedLoan’s center will close by the end of next year, according to Keith New, spokesperson for the Pennsylvania Higher Education Assistance Agency.

FedLoan is part of PHEAA, which services about 7.5 million federal student loan borrowers. The agency faces investigations from state attorneys general and lawsuits from disgruntled customers.

The agency has outsourced jobs to Florida and India. There are no plans to close additional facilities in Pennsylvania.

“We heard they were closing some facilities,” said Guy Ciarrocchi, president and CEO of the Chester County Chamber of Commerce. “So far it doesn’t affect any of our member companies or their employees.”

Americans owe about $1.6 trillion in college student loans as of 2019.

The federal student loan system is poorly run, the default rate among students is growing, and the harm is especially apparent in Pennsylvania, where students graduate with some of the highest debt in the nation, according to The Inquirer’s reporting.

PHEAA now services roughly $1 of every $5 in student loans in the country.

Read  more about this call center closing here.

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