What Are Common Student Loan Repayment Complaints Reported by Borrowers?

Posted on October 30, 2017 at 12:00pm by
Are changes coming to student loans?

The Consumer Financial Protection Bureau (CFPB) has published a report discussing the 22,900 complaints it received from student loan borrowers between September 2016 and August 2017. In its Annual Report of the CFPB Student Loan Ombudsman, the consumer protection agency listed the most common repayment complaints it received from borrowers with private and federal education debt. These complaints mention problems that include:

  1. Problems accessing federal loan protections: Borrowers reported difficulties accessing basic federal loan protections. For example, borrowers reported difficulties accessing protections that are designed to prevent default during periods of economic hardship. In some cases, borrowers with total and permanent disabilities had difficulties receiving loan discharges.
  2. Problems enrolling in income-driven programs: Income-driven programs allow borrowers to cap monthly payments to a percentage of their discretionary income. However, borrowers reported difficulties enrolling in and recertifying their income for these programs each year. Complaints mention problems with lost paperwork, poor customer service and inconsistent application processing.
  3. Limited options for payment relief: Unsurprisingly, private loan borrowers have complained about a lack of relief options during periods of economic hardship. According to these borrowers, they were unable to lower or temporarily halt their payments while on parental leave or after a job loss.
  4. Poor information from servicers: Much like federal loan borrowers, those with private loans claimed they received poor or incorrect information from their loan servicers. For example, some complaints mention that borrowers were not given enough information on how to become eligible for cosigner release.
  5. Problems with servicers following payment directions: Complaints mention that payments were not allocated in the manner intended by borrowers.

The CFPB’s 65-page report mentions other student loan issues, such as complaints involving debt collection tactics. However, the first half of the report discusses how loan servicers are creating repayment problems for borrowers.

If you are struggling with student loan payments, then it cannot hurt to have your situation reviewed by a professional. The Kansas City student loan lawyers at The Sader Law Firm can help you discover possible options for managing your higher education debt.

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