There has been increasing attention around the poor customer service provided by loan servicers. Some are being sued by government agencies, advocacy groups, and private parties for giving borrowers misinformation, mishandling loan forgiveness applications, placing borrowers on extended payments with compounding interest that make paying off student loans feel impossible, and charging borrowers much more than they should have to pay.
Even the individual responsible for the PSLF program and the government’s relationship with loan servicers isn’t pleased with the service they’re providing. Here is what John B. King, Jr. had to say,
“When loan servicers make mistakes, or don’t provide the right information at the right time, borrowers pay the price. Less than stellar student loan servicing is tripping up borrowers as they seek to climb the economic ladder. Borrowers deserve accurate, actionable and consistent information.” The Washington Post, July 20. 2016
A recent article in the New York Times exposes issues borrowers routinely experience with their student loan servicers.
Borrowers repeatedly receive incorrect information and payments are calculated wrong. Unfortunately, borrowers have no way of knowing this.
Based on our data, 95% of the people we talk to:
People come to us believing they are “in the program” only to find out they aren’t properly aligned with the regulations of the program. That means their payments won’t count toward their 120 qualifying payments. The latest DOE report indicates only 139 people are in line to receive loan forgiveness over the next two years. We can count on one hand the number of people who come to us and are properly aligned and making the lowest payment to which they are entitled.
“This is one of the most complex programs ever concocted by Congress. So many people who are counting on getting some help are going to be flatly rejected on a technicality. Many teachers and members of the military are in for a rude awakening. Their student loan financial headache will probably stay around longer than they had hoped.” Rohit Chopra*
* Senior Fellow at the Consumer Federation of America and Former CFP Student Loan Ombudsperson
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