Federal student loans are a pressing issue for millions of Americans, with some reporting long waits to speak with their loan servicing companies.
Lorelei Salas, Assistant Director of the Office of Supervision Policy at the Consumer Financial Protection Bureau (CFPB), said, "We have complaints from consumers who are waiting 3 to 6 hours to talk to someone. And then at the end of that very long wait, the call gets dropped."
According to the CFPB, it's not only the wait times causing issues. Borrowers seeking financial relief also face challenges. Salas explained, "There are borrowers who qualify for cancellation of their debt pursuant to the public service loan forgiveness program. However, when they're trying to reach their servicers, when they are able to get through, they are told that in many cases they'll have to wait until 2024 or several months because they need to do a manual review of some of those applications."
Others who might qualify for income-driven repayment plans, such as the recently introduced "SAVE” plan by the Department of Education, have also reported issues. The plan aims to reduce monthly payments to zero, depending on income and family size. Salas noted, "So these are very, very concerning issues for us."
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Rachel Rotunda, Director of Government Relations at the National Association of Student Financial Aid Administrators (NASFAA), said they anticipated the resumption of payments would likely overwhelm the servicing system.
She added that many borrowers had their loans transferred multiple times to new servicers during the payment pause. "Servicers, due to some funding constraints at Federal Student Aid, have not been able to ramp up their capacity in ways they might have liked. And that's only exacerbated by having tens of millions of borrowers who are trying to interact with the system at the same time."
What Can Borrowers Do?
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Rotunda suggests that borrowers use online resources to manage their loans. "Many functions like checking balances or setting up auto-debits can be done online, reducing the need for direct contact with servicers," she said. Borrowers can find out who's handling their loan by logging into StudentAid.gov with the same username and password used for their financial aid form.
"That's a really great place to start," Rotunda added.
Filing a Complaint
For those facing issues with their loan servicer, the CFPB provides an avenue for filing complaints. CFPB told NBC6 they reach out to the company to try to resolve the problem and they also review these complaints to identify patterns and take action against companies not following the rules.
