(PatriotWise.com) — Some student loan borrowers reported encountering problems with their student loan service providers after student loan payments resumed in September after being suspended during the pandemic, Axios reported.
According to a student loan advocacy group, the Student Borrowers Protection Center, the problems borrowers are facing suggest that the student loan servicing companies were not prepared for the resumption of payments.
The Student Borrowers Protection Center executive director, Mike Pierce, told Axios that borrowers have reported “a wide range of abuses” from student loan providers.
According to Pierce, his group has heard from borrowers whose monthly payments were automatically deducted from their bank accounts without ever signing up for the auto payment service. Other borrowers had problems locating the records necessary to apply for debt forgiveness.
Additionally, some borrowers told the Student Borrowers Protection Center that they experienced problems contacting their loan servicers’ customer service.
Pierce told Axios that those with “legitimate questions” on payment terms and programs “don’t have anywhere to go for accurate information,” which makes borrowers “more vulnerable” to financial predators and scammers while making them “less likely” to make their student loan payments.
Education Secretary Miguel Cardona acknowledged in a statement last Monday that the Department of Education has “uncovered errors from loan servicers” that his department would not tolerate.
The Department of Education announced on Monday that loan servicer MOHELA would be penalized for failing to send out timely billing statements to 2.5 million student loan borrowers, causing over 800,000 borrowers to miss making their monthly payments on time.
An Education Department spokesperson told Axios that the department is committed to holding student loan servicers “accountable for their mistakes” while “making things right for borrowers.”
In August, one student loan servicer sent a letter to Senate Democrats warning that the lack of funding would negatively impact customer service when repayments resumed in September.
Copyright 2023, PatriotWise.com