Where Do You Go if You Have a Student Loan Problem?

Student Loan Problem

Earlier this month, the Consumer Financial Protection Bureau (CFPB) released a report detailing the types of complaints it has received over the last three years. This not only included information about credit card and mortgage complaints, but also issues with private student loans.

Resolve a Student Loan Problem

The majority of the complaints the CFPB received regarding private student loans involved problems with consumers repaying their debt. Nearly 46 percent of consumers cited issues with billing, fees or restructuring their loans, and another 22 percent had problems when they were unable to pay on time.

Since these are common complaints among student loan borrowers, I thought it might be a good time to address a question I often get on social media: “Where do you go if you have problems with your student loans?”

Start With Your Student Loan Lender/Servicer

For issues regarding payments or balances due, be sure to gather any and all supporting documentation you may have on file. This will include notes you have taken during phone calls, correspondence received through postal mail or email, and all payment receipts.

Copies of your bank statements or cancelled checks may also serve to help verify payments. In many cases, you can log into your student loan account and pull a payment history, as well. Carefully review your paperwork to ensure your complaint is valid. If you find there is still a discrepancy, contact your student loan lender or servicer and file a formal complaint. Be calm and polite, and provide copies of all materials to support your claim.

You should also contact your lender or servicer if you are having difficulty making your payments on time. Ask about other repayment options, such as forbearance or deferment. If you have a federal student loan, you may also be eligible for one of several different repayment plans that can significantly lower your current monthly payments.

Most lenders will require proof of your income, so be prepared to provide copies of your recent tax forms and pay stubs to document any recent changes.

Regardless of the type of complaint, it’s very important that you document your process from the start. Whenever you speak with someone, take down his/her name, the date and time of the conversation, and keep notes about what was discussed. Always follow up in writing (paper or email); a paper trail is essential.

Request a copy of your customer service history, too. These steps will help you in the event your issue is not resolved.

Seek Additional Help

If you have provided suitable documentation to support your complaint, but your lender/servicer is still unwilling to help or the issue has not been resolved to your satisfaction, you may still have other resources at your disposal. Depending on whether you have a federal student loan or a private student loan, the next step will vary.

For federal student loans, you’ll want to review the Self-Resolution Checklist to ensure you have taken all the necessary steps to resolve the issue yourself. If you still need help, your next step would be to contact the Federal Student Aid Ombudsman Group. Before reaching out to them, complete the Information Checklist, as it lists many of the questions that will be covered during your initial consultation.

You can contact the Ombudsman Group by postal mail, phone, fax or you can file a confidential complaint through the online Ombudsman Assistance Request Form. Once the department receives your form, it will collect information about your case and offer assistance in identifying a suitable resolution.

If, however, you have a private student loan dispute, you should contact the Consumer Financial Protection Bureau (CFPB). Whether your student loan is issued by a bank, credit union or school, the CFPB can assist with finding a resolution for just about any student loan complaint. The process is fairly simple, too.

You can register your complaint online and attach any supporting documentation. Once your complaint has been received, the CFPB will forward it to your lender. The lender will have 15 days to respond and, in most cases, no longer than 60 days to provide a resolution. The CFPB has a very good track record for getting results, with 97 percent of lenders responding to complaints in a timely fashion. Over the last three years, more than 11,400 borrowers have filed a complaint, and 73 percent were satisfied with the resolution provided.

Even More Help Available

If you did not take the initiative to find a resolution for your student loan problems before you started missing payments, you may find that your are now faced with default. Although there is little recourse for private student loan default, you can still get help with federal student loan debt resolution through the Federal Student Aid’s MYEDDEBT.

Through this portal, you can get information on how much you owe on your defaulted federal student loans, your payment history, and options for resolving your debt. You can also access forms to request a hearing, review, or discharge of your debt, as well as forms to submit a complaint. Ignoring your debt won’t make it go away, so do yourself a favor and seek help as soon as possible.

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