American Education Services (AES) is a private and federal student loan servicer that handles student loans from a wide variety of lenders. If you have a Federal Family Education Loan, there's a good chance it's serviced through AES.
You don't typically get to choose your loan servicers. However, if you ended up with AES and have questions, you're in the right place. Let's walk through everything there is to know about American Education Services.
What Is AES?
AES, or American Education Services, is a student loan servicer. Student loan servicers are companies that handle the repayment and administration of student loans for lenders. They don't typically offer loans themselves.
AES was founded way back in 1963 to help service the Federal Family Education Loan Program (FFELP) and has been operating ever since. These days, it services both private student loans and federal student loans to millions of students at thousands of schools.
In addition to loan servicing, AES also provides several other financial services, including loan guarantees, financial aid processing, and various student aid and outreach programs.
How Does AES Work?
American Education Services doesn't offer loans itself. Instead, as a student loan processor, it handles the billing and various other services around student loans. AES works with both federal student loan providers, such as the U.S. Department of Education, as well as private lenders.
In practice, that means that if your loan is handled by American Education Services, it could be either federal or private. This has implications for your repayment options since federal loans like the Federal Family Education Loan or Direct Subsidized Loans have special payment plans available.
In either case, though, you'll receive your statements from AES, and then make your loan payments to them each month. The company offers a number of payment options, which we'll discuss later in the article.
AES Services at a Glance
| Service | Detail | Good to Know | ||
|---|---|---|---|---|
| Choice of Payment Methods | 6 ways to pay | Lower interest for direct debit payment | ||
| Payment Reduction Options | Depends on loan type | More help for federal loans | ||
| Deferment and Forbearance | Options available | Severe hardship required | ||
| Other AES Services | Financial aid information | Form library access |
AES offers most of the basics you'll find with student loan servicers. They'll take your payment in a number of ways, and will generally work with you if you need a little help making your payments.
Let's walk through each of these services in detail and see how AES stacks up.
Choice of Payment Methods
As mentioned above, you can make your AES student loan payments with a variety of methods: direct debit, online payments, payments via the American Education Services mobile app, payment over the phone, payment by mail, and even payment via third-party bill pay services. Let's run through each of these methods:
Direct Debit Payment
Direct debit payments are automated monthly payments on a schedule. Simply set this up on the American Education Services website and the amount of your monthly student loan payment will be automatically debited each month, even if the due date falls on a weekend or holiday.
This is handy because you don't need to worry about remembering to make the payment. These payment plans also sometimes qualify for a small interest rate reduction (up to 0.25%), which is always nice.
Online Payment
If you don't like the automated nature of the direct debit option, you can still pay electronically online on your own terms. You'll need to input your bank account details, but you can save this information for future monthly payments, so you don't need to input it every time.
The disadvantage of these online payments is that you need to remember to actually log in and make the payment. However, that's also the big advantage â€" not everyone is comfortable with automatic withdrawals, and some pay schedules aren't regular enough to make them realistic. This gives you another relatively simple option.
Payment Via Mobile App
If you prefer to handle things on your smartphone, that's also an option with American Education Services. In fact, you may prefer this option simply because the AES mobile app is surprisingly easy to use. Just log in (you can use FaceID or a fingerprint scanner if your phone has one), head to the 'Pay' tab, and enter your details. You can also use the app to view your student loan details and get an idea of where your account stands.
Finally, the app makes it easy to set up automatic payments. This is handy if you want to worry about your payments less or take advantage of that interest rate reduction.
Payment By Phone
If you prefer to make your student loan payments over the phone (or don't have a choice), that's an option with AES. Call 1-800-233-0557 and provide the requested information. You'll need your AES account number and date of birth to identify yourself, along with your bank account number and routing number for the payment. Fortunately, you can save the bank information, so you'll only need to provide it once.
The caveat with AES phone payments is that your payment will be spread evenly across all of the student loan debt on your account, so you'll have to make sure you pay enough to cover the minimum required payments. If you only want to pay on a single loan, you'll have to use the online method.
Payment Via Mail
If you're feeling really old-fashioned, you can mail your payment in via check or money order. Make the check out to American Education Services and address it to:
American Education Services, P.O. Box 65093, Baltimore, MD 21264-5093
The check should include your AES account number.
Third-party Bill Pay
Finally, you can make your student loan payments through a bill pay service, such as those offered by many banks. If you're going to go this route for making your payments, just note that AES can't offer any interest rate reductions or other incentives for payments made through third-party services. It's also important to make sure the bill pay service has the correct address for AES.
Payment Reduction Options
If you can't make your monthly payments, or things are a little tight, you have options. However, which options you have available depends on whether you have private student loans or federal student loans. Unfortunately, there's not much AES can do about this.
If your American Education Services student loans are through private lenders, you can contact AES directly to discuss repayment options. It's not guaranteed, but sometimes you can negotiate a payment plan similar to the federal options, which we'll get into next. At the very least, you might be able to put a pause on payments until you can get into better financial shape (see the section on deferment and forbearance below). It never hurts to ask.
Student loan borrowers with a federal loan have a lot more options. The federal Standard Repayment Plan is 10 years of fixed payments. However, federal loans are eligible for a number of repayment plans, including the following:
Graduated Repayment Plan
The Graduated Repayment Plan lets student loan borrowers make smaller payments towards the beginning of their loan repayment period, with payments increasing over time. The idea is that your income is more likely to be lower when you first start repaying, whereas over time the payments increase to match your income.
Income-Based Repayment (IBR)
The IBR program bases your payments around your income and family size. Depending on when you secured the loan, your payment will be either 10% or 15% of your discretionary income.
Additionally, the loan will be eligible for forgiveness after 20 or 25 years (again, depending on when the loan was secured). This is an excellent option for families with lower incomes.
Revised Pay As You Earn Repayment Plan (REPAYE)
The REPAYE plan is somewhat similar to the IBR plan, but with fewer restrictions. With this plan, you'll make payments of 10% of your discretionary income.
This plan also offers loan forgiveness after a period of time â€" 20 years for an undergraduate student loan, and 25 years for graduate or professional student loans.
Income-Contingent Repayment (ICR)
ICR plans allow you to pay either 20% of your discretionary income or what you would pay on a fixed, 12-year repayment plan â€" whichever is lower. Federal student loans under an ICR plan are eligible for forgiveness after 25 years.
Deferment and Forbearance Options
American Education Services student loans are also eligible for deferment or forbearance. These two options are available for all federal student loans and some private student loans.
Deferment
This is a process where payments are temporarily stopped on your loan account. Your loan may or may not accrue interest during the deferment period, depending on whether it's federally subsidized.
Forbearance
This is similar to deferment, but you are always responsible for the interest that accrues during forbearance.
Qualifying for either deferment or forbearance generally requires that you have a significant financial hardship, such as unemployment, and that you're enrolled at least half-time as a student. If you have a private student loan, you may have additional requirements.
Other AES Services
AES offers a number of other services, including financial aid services for schools and various solutions for lenders, such as a library of common forms.
AES Review: The Pros and Cons
These pros and cons can help you understand more about AES since you don't really have a choice in selecting a loan servicer.
Pros
- Lots of repayment options. Student loans can be repaid in nearly any fashion you can imagine, from automatic debits to payments via a mobile app.
- A solid mobile app. Speaking of mobile apps, the AES app is actually quite good. It allows you to get a quick overview of your accounts and make easy payments from anywhere.
- A long track record. American Education Services has been around for a long time (1963). While this doesn't guarantee anything, it can still be an indicator of trustworthiness.
Cons
- No real choice in the matter. If you have AES and like them, great. If you don't, your only option is to consolidate or refinance your student loans and hope for a different loan servicer.
- Complaints. AES's parent company was the subject of a class-action lawsuit in 2021. Plenty of borrowers will have no issues with AES, but it's worth being aware of past issues.
Frequently Asked Questions About American Education Services (AES)
If you still have questions about AES, don't worry â€" we've got answers.
Yes, AES is legit. In fact, it's a huge loan servicer that serves millions of students and thousands of schools around the country, including federal student loans. If you're concerned because you don't recognize the name, you can relax!
AES is technically not a loan at all. It's a loan servicer, which means it handles repayment and administration of student loans provided by other lenders.Â
That said, the loan you're paying on through AES could be either government or private, depending on where it originated. If it was originally a federal student loan, that won't change, even though you're paying on it through AES. The same is true for private student loans.Â
The short answer is 'it depends.' If you have a federal student loan and qualify for one of the income-based repayment options, like REPAYE or IBR, your loan will be forgiven after 20 or 25 years of payments.Â
And if you work in the public sector, you may qualify for the Public Service Loan Forgiveness (PSLF) program. Public Service Loan Forgiveness essentially offers loan forgiveness after a shorter period of payments than available with the income-based plans alone.
Your AES loan will be either federal or private, depending on where it originated. If your original loan was a federal loan, it will remain federal (with all the attending benefits) with AES. Similarly, if your loan came from a private lender, it will be private with AES.Â
This is because AES doesn't actually provide the loans â€" it's a loan servicer, which means it basically handles the payments and administration of the loan for another company.
If you're not sure whether you have a federal or private student loan, the simplest way to find out is to check the federal student aid website: studentaid.gov. This site has information on all federal student loans, so if yours is federal, it'll show up here. The site will also provide student loan details like the servicer and outstanding balance.Â
You can also check your billing statement or simply contact AES and ask them directly â€" they'll be able to tell you whether your loan is private or federal.
Penny Hoarder contributor Dave Schafer has been writing professionally for nearly a decade, covering topics ranging from personal finance to software and consumer tech.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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