HomeEconomyStudent loan borrowers are facing

Student loan borrowers are facing

Student loan repayment date is here, resuming after 3-year hiatus

Student loan repayment date is here, resuming after 3-year hiatus


As student loan repayment requirements resume this month, some borrowers are experiencing customer service issues with their loan servicers. The resulting chaos has prompted 19 state attorneys general to argue that consumers facing servicer difficulties shouldn’t have to repay their debt until the problems are resolved. 

In a Friday letter to the Department of Education, 19 state attorneys general wrote that they were alarmed by “serious and widespread loan servicing problems” with the resumption of repayments this month. One advocacy group, the Student Borrower Protection Center, said some borrowers are experiencing a “nightmare” situation of long wait times and dropped calls, making it difficult to get answers to questions about their loans.

The issues are arising as student loan repayments are restarting in October after a hiatus of more than three years. During the pandemic, some loan servicers opted to get out of the business, which means some borrowers are dealing with new servicers. Borrowers are reporting problems like wait times as long as 400 minutes and customer service reps who are unable to provide accurate information, the AGs wrote in their letter. 

“The borrowers who reach out to us are having trouble getting through to customer service representatives to find out about their repayment options,” Persis Yu, the deputy executive director of the Student Borrower Protection Center, told CBS MoneyWatch. “Many are waiting several hours on hold and many never reach a real human at all. Those who do get through are getting confusing, and often incorrect information.”

New loan servicers “have little to no experience with such volumes and do not appear to be sufficiently staffed to respond to them,” the AGs wrote in their letter. 

The Department of Education didn’t immediately respond to a request for comment.

How to spot student loan forgiveness scams


Interest-free forbearance?

Because of the problems that borrowers are encountering, people who are impacted by servicer issues should have their debt placed in “non-interest-bearing administrative forbearances,” meaning that their loans wouldn’t accrue interest, until the problems are resolved, the attorneys general wrote. 

The attorneys general who signed the letter are from  Arizona, California,Connecticut, Colorado, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New York, Oregon, Pennsylvania, Vermont, Washington and Wisconsin, as well as Washington, D.C.

“Even our offices and state student loan ombudspersons are having trouble obtaining timely responses from some servicers through government complaint escalation channels,” the AGs wrote. “And when borrowers do reach servicers, many report dissatisfying interactions, including representatives being unable to explain how payments were calculated, unable to resolve problems, or providing inconsistent information.”

The pause on student loan payments began in March 2020 as part of a series of pandemic-related economic relief measures. The pause was extended several times after that, but Congress earlier this year blocked additional extensions.

Source link



Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Recent Comments