Current:Home > StocksCharles H. Sloan-Student loan borrowers are facing "nightmare" customer service issues, prompting outcry from states -EliteFunds
Charles H. Sloan-Student loan borrowers are facing "nightmare" customer service issues, prompting outcry from states
SafeX Pro Exchange View
Date:2025-04-09 16:56:19
As student loan repayment requirements resume this month, some borrowers are experiencing customer service issues with their loan servicers. The resulting chaos has prompted 19 state attorneys general to argue that consumers facing servicer difficulties shouldn't have to repay their debt until the problems are resolved.
In a Friday letter to the Department of Education, 19 state attorneys general wrote that they were alarmed by "serious and widespread loan servicing problems" with the resumption of repayments this month. One advocacy group, the Student Borrower Protection Center, said some borrowers are experiencing a "nightmare" situation of long wait times and dropped calls, making it difficult to get answers to questions about their loans.
The issues are arising as student loan repayments are restarting in October after a hiatus of more than three years. During the pandemic, some loan servicers opted to get out of the business, which means some borrowers are dealing with new servicers. Borrowers are reporting problems like wait times as long as 400 minutes and customer service reps who are unable to provide accurate information, the AGs wrote in their letter.
- Biden opened a new student debt repayment plan. Here's what to know
- Options are available for those faced with repaying student loans
- What happens if you don't begin repaying your student loans?
"The borrowers who reach out to us are having trouble getting through to customer service representatives to find out about their repayment options," Persis Yu, the deputy executive director of the Student Borrower Protection Center, told CBS MoneyWatch. "Many are waiting several hours on hold and many never reach a real human at all. Those who do get through are getting confusing, and often incorrect information."
New loan servicers "have little to no experience with such volumes and do not appear to be sufficiently staffed to respond to them," the AGs wrote in their letter.
The Department of Education didn't immediately respond to a request for comment.
Interest-free forbearance?
Because of the problems that borrowers are encountering, people who are impacted by servicer issues should have their debt placed in "non-interest-bearing administrative forbearances," meaning that their loans wouldn't accrue interest, until the problems are resolved, the attorneys general wrote.
The attorneys general who signed the letter are from Arizona, California,Connecticut, Colorado, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New York, Oregon, Pennsylvania, Vermont, Washington and Wisconsin, as well as Washington, D.C.
"Even our offices and state student loan ombudspersons are having trouble obtaining timely responses from some servicers through government complaint escalation channels," the AGs wrote. "And when borrowers do reach servicers, many report dissatisfying interactions, including representatives being unable to explain how payments were calculated, unable to resolve problems, or providing inconsistent information."
The pause on student loan payments began in March 2020 as part of a series of pandemic-related economic relief measures. The pause was extended several times after that, but Congress earlier this year blocked additional extensions.
- In:
- Student Loan
- Student Loans
veryGood! (8819)
Related
- Buckingham Palace staff under investigation for 'bar brawl'
- Red Sox beef up bullpen by adding RHP Lucas Sims from the Reds as trade deadline approaches
- Who is Alex Sedrick? Meet 'Spiff,' Team USA women's rugby Olympics hero at Paris Games
- Target denim take back event: Trade in your used jeans for a discount on a new pair
- McConnell absent from Senate on Thursday as he recovers from fall in Capitol
- Cardinals land Erick Fedde, Tommy Pham in 3-way trade with Dodgers, White Sox
- Look: Ravens' Derrick Henry reviews USA rugby's Ilona Maher's viral stiff arm in 2024 Paris Olympics: 'She got it'
- Erica Ash, 'Mad TV' and 'Survivor's Remorse' star, dies at 46: Reports
- A South Texas lawmaker’s 15
- Israeli Olympians' safety must be top priority after another sick antisemitic display
Ranking
- Person accused of accosting Rep. Nancy Mace at Capitol pleads not guilty to assault charge
- A New York state police recruit is charged with assaulting a trooper and trying to grab his gun
- Ryan Murphy keeps his Olympic medal streak alive in 100 backstroke
- Sheriff's deputy accused of texting and driving in crash that killed 80-year-old: Reports
- Will the 'Yellowstone' finale be the last episode? What we know about Season 6, spinoffs
- Providence patients’ lawsuit claims negligence over potential exposure to hepatitis B and C, HIV
- 8 US track and field athletes who could win Olympic gold: Noah, Sha'Carri, Sydney and more
- Heavy rain in northern Vermont leads to washed out roads and rescues
Recommendation
The FBI should have done more to collect intelligence before the Capitol riot, watchdog finds
Chants of 'Heil Hitler' shouted by antisemitic protestors at Israel Olympic soccer game
New Mexico gets OK to seek $675M in federal grant to expand high-speed internet across the state
Ryan Reynolds Shares Look Inside Dad Life With Blake Lively and Their 4 Kids
Biden administration makes final diplomatic push for stability across a turbulent Mideast
How Stephen Nedoroscik Became Team USA's Pommel Horse Hero
Did Katie Ledecky win? How she finished in 1500 free heat, highlights from Paris Olympics
Did the Olympics mock the Last Supper? Explaining Dionysus and why Christians are angry