Any federal student loan borrower has probably faced this issue at some point: you have a problem that can be easily fixed, but your loan servicer isn’t helping.
This situation is even more frustrating when you know the servicer can do what you request, but you can’t find the right words or talk to the right person.
If your servicer won’t help, don’t lose hope. Borrowers have resources to go to get the help they need.
When Servicers Don’t Help: An Example
Last week, I heard from a reader named Kyle who had a simple issue.
Kyle wanted a refund on payments he made during the COVID payment and interest freeze. It is the Department of Education’s policy to refund these extra payments. For most borrowers, it is a simple phone call, and the servicer issues the refund.
Kyle’s situation is a bit more complicated because his loans were transferred from MOHELA to FedLoan Servicing. MOHELA says FedLoan Servicing should handle the refund. Meanwhile, FedLoan Servicing claims it is MOHELA’s responsibility.
If you are in a situation like Kyle’s, the following provides some steps you can take to get the help you need.
Loan Servicer Ombudsman
An ombudsman is someone who investigates and helps resolve complaints.
Each of the federal student loan servicers has an ombudsman.
If the standard customer service representatives can’t help, in many cases, an ombudsman might be able to. Servicers don’t do a very good job publicizing ombudsman contact information. However, this is one phone call or email that can make a huge difference.
The Department of Education
All federal student loan servicers report to the Department of Education.
If your servicer doesn’t do its job, filing a complaint with the Department of Education may help.
The Department of Education has an online portal for borrowers to submit and track complaints. The Federal Student Aid Ombudsman Group handles these disputes. Borrowers can also call the FSA Ombudsman at 1-877-557-2575.
Getting Creative: Sometimes, a creative solution is the best solution. Try to come up with an idea unique to your circumstances.
For example, in Kyle’s situation, I suggested he arrange a 3-way call between MOHELA and FedLoan Servicing. If neither takes responsibility, having both on the line might force them to resolve the issue together.
File a Complaint with the Consumer Financial Protection Bureau
The CFPB is the federal agency responsible for protecting consumers against false or deceptive financial products and services.
Notably, the CFPB filed a massive lawsuit against federal student loan servicer Navient for failing to assist borrowers properly. This lawsuit could not have happened without borrowers coming forward to share their experiences and issues.
Borrowers can submit a complaint to the CFPB here. Additionally, we have previously published a guide to filing a CFPB complaint.
Contacting Elected Officials and Members of Congress
Americans hold a very low opinion of the United States Congress. This is, in part, because members of Congress often have a reputation for doing very little once elected.
Consequently, many borrowers are surprised to learn that Congressional offices can often be very helpful in these situations.
Constituent services provided by members of the House of Representatives and Senate can help student loan borrowers in a significant way. These Congressional staffers are especially adept at helping voters navigate complicated government red tape. Additionally, an email from the office of a member of Congress can make a huge difference.
When your elected official gets involved, the red tape may disappear and processing times are often significantly reduced.
Final Thought: The Human Element
The call center representatives have demanding and stressful jobs. They deal with angry and frustrated borrowers all day. They are often underpaid and poorly trained.
These interactions can be frustrating and tedious.
Yelling won’t help.
If you talk to a representative who doesn’t seem able or willing to help, hang up and call again. If you are kind and patient with the human being on the other end of the line, they might want to help you. Finding an ally could be the lucky break you need.