Sherpa Mailbag: My Lender Messed Up, What Should I Do?

Michael Lux Best Of, Blog, Mailbag, Student Loans 0 Comments

Yesterday we got a very interesting from a reader dealing with a lender who made a mistake.

I sent a large payment to Sallie Mae with written instructions to pay off my unsubsidized Stafford Loan in full, and to use the remaining payment for the subsidized loan.  However, Sallie Mae failed to pay off the unsubsidized loan, so now I have a small balance on both.

This is a tricky situation.  Whenever you have a lender make a mistake there are two major hurdles that you have to get over.  First, you have to get your lender to acknowledge that they made a mistake.  Second, you have to find someone who can fix the mistake.  Neither step is easy, but it is possible to get your problems fixed.

Getting Your Lender to Admit Their Mistake

Often, getting a lender to admit that a mistake occurred boils down to whether or not you have proof.  This is especially difficult for phone conversations.  If you have a customer service representative tell you one thing, but then you learn that you were given bad information, you are often out of luck.  Fortunately for our reader with a question, the instructions were provided in written format.

In this case, the first thing you should do when you contact your lender is try to get the piece of paper or email you sent in front of the person you are talking to.  When you call, ask how these instructions would have been kept in their records and who has access to that information.  The sooner you put someone in front of that information, the better off you will be.

A good lesson here is that communicating in writing is preferable if you ever have to prove something at a later date.  Sometimes a phone conversation is essential.  When this happens you can ask for an email confirming what you have been told, but in my experience, they almost never are able to do that.  Your next best bet is to ask them to make a note in your file.  Many companies will leave notes of some sort in a computer file.  If you speak to a representative who gives you information that you think is too good to be true, or you want to make certain that you can prove you were told certain information, ask them to add a note in your file.  In the future, you can mention that you specifically asked that a note be added to your file.  It won’t always work, but it doesn’t hurt to try.

Getting Your Mistake Fixed

Nothing is more frustrating than be told, we made a mistake, or you were given bad information, but there is nothing we can do about it.

To avoid this, first clear up in your mind exactly what it is that you want done.  In the case of our reader with a question, we want someone with the authority to transfer money between balances and correct any interest that should not have been charged.  This likely will not be a customer service rep, but instead a manager of some sort.

When you call in, please avoid just saying “I’d like to speak to your manager or whomever is in charge.”  No doubt, you are frustrated, but being a jerk on the phone almost always gets bad results.  You are asking for help, whether they made a mistake or not, you want the person on the other end of the conversation to want to help you.  Therefore, when you have a situation like this, start out by saying that you believe money was paid towards the wrong loan and you would like to get it fixed.  Ask if the person you are talking to has the authority to correct that mistake.  If they don’t, see if you can talk to someone who does.  Make it clear that your goal is not to waste anyone’s time.  Going through this step will help you avoid having to explain something two or three times.

Regardless of your individual problem, working with rather than against your student loan lender is always the preferable choice.  Frame the discussion around the issue that the two of you are working together to solve.  Be as helpful to them as you can.  A little kindness will often get you the best results.

One example

I once was trying to get a mistake corrected with my federal student loan consolidation.  I learned I was enrolled in the wrong repayment plan, and that mistake was going to cost me hundreds of dollars.  I was beyond frustrated.  After being bounced around from person to person, I caught myself quickly losing my temper with the third or forth person I spoke with.  I said the following to apologize:

I’ve clearly losing my cool here, and I do apologize.  I realize that you have not done a single thing wrong to me or mistreated me in any way and at best, my grief is with your company not you.

I then took a deep breath, and proceeded to explain my situation.  The kind woman at the other end of the phone found a way to fix my problem and I’m certain she went above and beyond the call of duty.  My problems were fixed almost immediately.