Guide to Fixing Lender Errors on Payments

Michael Lux Blog, Student Loans 0 Comments

A sad reality of life with student loans is that often lenders make mistakes that cost you the borrower money.  Whether or not the lenders are just incompetent or intentionally doing a lousy job is an interesting question, but not one we will be answering today.  Instead, the focus is on dealing with the crisis at hand: how do I get my lender to fix their mistake?

The most common error deals with payments.  Payments can be scheduled at the wrong time, or for the wrong amount.  When this happens, borrowers can get stuck with late fees and additional interest.

Getting Things Fixed

Discussing these issues can often feel like you are talking to a wall.  Customer service representatives are often trained to use phrases like, “I can see why that would be frustrating” or “what can I do to help?”  Unfortunately, they do not seem to get very good training on getting to the bottom of an issue or on fixing things.

When you run into this situation, the best thing to do is to ask to “escalate” your problem.  Escalate is the industry term for putting a supervisor on your particular issue.  The supervisor should have better training, more experience, and the authority to fix your issue.

Before you even call, you need to make sure you are prepared for this conversation.  Student loan servicers are essentially debt collectors, which means they are likely lied to often and they have probably heard every lie in the book.  Because of this, provable facts are your friend.  Details are essential.  Use the call log on your phone to make a list of all the calls you have made regarding this issue.  Use exact times.  Visit the lender website.  Download copies of whatever materials might be important.  This would include payment histories and confirmation numbers.

When you discuss things, be quick and to the point.  The stress this has caused or how the issue makes you feel does not matter.  When you speak to the supervisor, thank them for taking the time to chat with you, and make your case.  Start by stating what the issue is, how you identified the issue, and what needs to be done to fix it.  Assume they know nothing about your particular problem.  It may be the fifth time you’ve discussed it with your lender, but it could be the first time for this particular person.

Finally, get contact information for that individual supervisor should follow up be necessary.  Procedures vary among the lenders.  Some will only be able to give you a reference number for your issue, or an employee ID number.  Others may be able to provide you an email address or direct number for the supervisor.  Even if you think they have everything under control, be sure to ask for this information anyway.  You don’t want to start at the beginning if there are further problems.

Mistakes to Avoid

Getting pissed and yelling may relieve the tension for you, but it won’t get your problem fixed.  In all likelihood, it will cause the loan servicer to dig their heels in and refuse to change their mind.  As consumers we have so little power in these situations.  It is wrong on many levels, but for purposes of resolving your individual issues, you need to realize that you may only get help if they want to help you.

Threatening to take your business elsewhere will not work either.  Even though you technically could be refinancing with lenders like SoFi or LendKey, the threat will ring hollow for two reasons.  First, the customer service people don’t work on commission and they don’t care if you take your business elsewhere.  Second, refinancing is about getting lower interest rates and saving money.  If you can save money by going elsewhere, just do it.  Don’t pretend you will to your current lender.  They will see through the threat.

Throwing Down the Hammer

If talking to a supervisor doesn’t get your problem fixed, it might be time to file a complaint against your lender.  These complaints can help resolve individual problems and they also can lead to lawsuits against lenders.

If you have time to make only one complaint, we suggest going through the Consumer Financial Protection Bureau.  The CFPB is part of the federal government tasked with protecting consumers.  Their student loan complaint process requires lenders to respond to the complaints.  A guide to the process and how to get the most out of it can be found here.

Additionally, if you have federal loans, you can also file a complaint with the Department of Education Ombudsman.  The Ombudsman will collect information regarding your case and try to find a resolution.

Final Thought

In any lender dispute, being able to prove your side is essential.  The better you do keeping records, the better your odds of success will be.  That means saving confirmation forms.  It also means submitting requests online instead of over the phone.  When possible, try to use email for lender communications instead of discussing it over the phone.  Most lenders avoid email for this very reason, but if you can email, go that route.