department of education complaint

Department of Education Creates New Student Loan Complaint System

Michael Lux Blog, Fixing Student Loans, News, Student Loans 0 Comments

This month the Department of Education announced a new feedback system for borrowers to leave complaints regarding schools, loan servicers, and even debt collectors.  There is also now a system for leaving positive feedback, though we suspect that feature will be significantly less popular.

The Department of Education seems to be slowly realizing that federal loan servicing, and the federal student loan experience in general, is sorely lacking.  For borrowers with federal student loans, long delays, poor customer service, and unnecessarily complicated processes have become all too common.

According to the new feedback/complaint website, borrowers can leave complaints about the following topics:

  • applying for and receiving federal loans;
  • grants, and work study;
  • federal loan servicing;
  • the collection of defaulted federal loans, and;
  • complaints about schools’ administration of federal student aid programs.

One of the nice features offered is that the individual filing the complaint has the option of whether or not they disclose personal information.  A complaint can be filed anonymously, or you can share specifics so that the Department can look into your individual situation.

The Optimistic View

This new tool could be incredibly powerful for both borrowers and the Department of Education.  Typically when a loan servicer makes an error or misleads the borrower in some way, the borrower has no recourse.  Borrowers have no say in who services their loans, and servicers have little incentive to perform high quality service.  Starting now, borrowers can directly communicate with the Department of Education and mistakes can start to be addressed.

From a bigger picture perspective, this tool can be a huge asset for the Department of Education.  It should help identify schools that are misleading students as well as loan servicers that are performing poorly.

A More Realistic View

If you are hoping for the new complaint system to fix all your student loan related problems, odds are you are out of luck.

Instead, look at the new portal as yet another tool for dealing with student loan issues.  Filing a complaint with the Department of Education, as well as the Consumer Financial Protection Bureau can result in more scrutiny and attention directed at your situation.

In many ways the deck is still stacked against borrowers, but this new feature from the Department of Education should at least tip the scales a little bit further in the direction of borrowers.