If you believe your account balance is wrong, ask your loan holder for a statement that shows all payments made on your student loan account. If you believe payments that you made were not credited to your account, you will need to provide proof that these payments were made.
For federal loans, the Department generally assigns you a servicer and says that you cannot switch! (See the Department’s answer to the question about whether borrowers select loan servicers). However, if you are consolidating your loans, you can choose among a limited list of servicers offered by the Department.
The Department of Education has contracts with a number of loan servicers. If you are not sure who your loan servicer is, you can look up this information at National Student Loan Data System or by calling 1-800-4-FED-AID. There is a separate section of the Department’s web site on servicing and collections.
Complaints about Servicers
You may want to contact the CFPB if you are having trouble with servicers of either federal or private student loans. You can submit a complaint to the CFPB AND to the Department using the on-line Federal Student Aid (FSA) Feedback System.
You should also contact your loan servicer directly. Department of Education loan servicers are supposed to do more than just collect payments. They should also help with questions about loan consolidation, cancellations, and other programs. You can learn about and apply for these programs for free. Beware of “debt relief” companies that charge (often a lot of money) for these same services that you can do for free. You should also not give these companies access to your student aid information. They shouldn’t be asking for it, but most do! The Department of Education has also warned borrowers about these companies.
Servicing Competition
In April 2016, the Department of Education announced a new competition for federal student loan servicing. The Department has proposed a number of changes, including the creation of a uniform set of customer service standards, single loan management platform and Department-branded portal. The Department announced the next step in the process in October 2016. However, in April 2017, the Department withdrew a number of Obama Administration memos setting out guidelines for the new servicing procurement process. In August 2017, the Department announced that it was canceling the current solicitation. According to the announcement, the Department will have a new “processing and servicing environment” in place prior to the expiration of the current contracts in 2019. The Department has provided some information about what the new system might look like, but there are still many unresolved questions. A number of U.S. Senators have written to the Department with concerns, including this December 2018 letter. Stay tuned!
Tips for Dealing with Your Loan Servicer
The Department of Education Ombudsman gives these tips for staying in touch with loan servicers:
It is usually best to communicate with your loan servicer in writing, because you’ll have a physical record of what has been said and done.
- Keep careful notes of all conversations you have. Follow up in writing so you have a physical record of what has been said and done.
- Request a copy of your customer service history; some loan servicers make available copies of the notes that customer service representatives make on your account.
- When you speak with someone on the phone, make a note of whom you speak to and when, and what was said. When you use mail, keep a copy of your letter and of any replies you receive.
- Save the originals of all receipts, bills, letters, and e-mails regarding your account. Provide copies of the originals if you are asked for them. Send letters via certified mail, with a return receipt requested.
- Don’t let the emotion of the moment get to you. If you are not getting a proper response to your questions, calmly explain again what information or resolution you are seeking.
- Be polite and courteous, but don’t be afraid to give the detail of any incident and to state your concerns. Write down the facts in the order they took place and stick to what is relevant. Include important details such as your account number at the top of your letter.
- Ask for a response in a reasonable time, and be sure to tell the customer service representative how you can be reached.
*The Federal Student Aid, an Office of the U.S. Department of Education