One of the most frustrating student loan problems is a lender mistake. Whether it is a servicer miscalculating payments, a lender withdrawing too much money, or a student loan company applying funds to the wrong long, correcting these mistakes may appear to be complicated. The good news is that there are a few simple steps that can be taken to address most student loan errors.
Calling up customer service to yell isn’t the best approach. Instead, gather your thoughts and materials and ask to have the issue escalated. The key is to put together the right information and present it to the proper person.
Many customer service representatives are not authorized to fix certain errors. Talking to the wrong person will be frustrating and unproductive. The following steps were designed to help student loan borrowers to get positive outcomes when addressing lender mistakes…
Document how and why your lender is wrong
If it is your word against your lender’s word, you are probably going to lose.
Providing proof can be a challenge because most lender interactions take place over the phone. Taking notes on your conversations will not be definitive proof, but these notes can still be a useful resource in correcting errors.
Ideally, conversations in emails or chats can be saved on your computer. Taking a screenshot can also work.
Documentation is especially useful for addressing payment issues. If your lender applied funds to the wrong loan, they will be more likely to correct the error if you can show the instructions that you provided at the time of payment.
Sometimes it isn’t possible to document every issue, so don’t panic if you don’t have documents to back up your arguments. However, the more information you can provide to back up what you are saying, the better.
Customer service representatives work on strict timelines. Their job requires them to resolve customer issues within a few minutes.
The rush to end a call can cause problems. Customer service representatives may tell you that there is nothing that can be done to fix your student loan issue.
When this happens, it is best to ask to speak to someone with the authority to make the account changes you are requesting. Most servicers use the term “escalate” to describe a call or issue that is being sent to a specialist.
The escalated calls are directed to representatives with more authority and experience. In cases where there is a calculation error or a complicated mistake to fix, these individuals are far more likely to be able to help.
If your lender withdrew too much money from your account, it is essential to be talking to the right person. The average representative probably isn’t able to return funds to an outside bank account. Asking to speak to someone with the ability to fix this specific problem can save you and your lender some valuable time.
See if your lender has an ombudsman or consumer advocate
The larger student loan companies have employees tasked with making sure customers are treated fairly.
The effectiveness of these individuals may be up for debate, but there are certainly some circumstances where they can help.
At Sallie Mae and Navient, these employees are called customer advocates. They even publish a specific mailing address and phone number for borrowers to make contact.
The best way to find customer advocates at other lenders is to run a quick search for “lender name + customer advocate” or “lender name + ombudsman.”
This is yet another resource where your mileage may vary, but reaching out has two significant benefits. Ideally, this conversation gets your situation resolved. However, even if it doesn’t get things fixed, it is excellent evidence of the steps you took to resolve the issue before jumping to the next level.
Complain to the Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau (CFPB) has helped many student loan borrowers.
The CFPB brings lawsuits against lenders, but they also provide a venue where borrowers can make a complaint, and lenders respond most of the time.
Because the complaint process is done under the watchful eye of a government agency tasked with protecting consumers, student loan companies have a considerable incentive to quickly address mistakes they made and to treat borrowers fairly.
This is also the stage in the process where the documents saved can be helpful. These records can back up your complaint. The documents will also help explain the issue and provide a timeline.
Is it time for an attorney?
This site was created on the theory that most student loan issues are DIY.
Unfortunately, not all student loan issues fall into the DIY category. If your lender has made a massive mistake that could cost you thousands of dollars, an attorney might be a good investment.
Generally speaking, opting for legal representation starts to make sense as things get more complicated, and the financial stakes are raised.
If you are angry that your extra payment of $100 was applied to the wrong loan, getting a lawyer won’t be worth the cost. If you paid off a loan in full and your lender is trying to collect again, an attorney could be a good investment.
Lender mistakes can be a nightmare. Loan servicers can often seem uninterested in helping or incapable of resolving the issue.
When frustration sets in, tempers may flare. Unfortunately, a heated exchange is unlikely to lead to a positive outcome.
The previous steps are designed for borrowers to have a calm and systematic approach to dealing with student loan company errors. Things may not be fixed in an instant, but a gentle, deliberate approach is usually the best bet.