How to Complain about Your Student Loans
There are many reasons why a borrower or cosigner might wish to complain about their student loans. They want a solution to the problems they have experienced. They want to hold the lender or servicer accountable for their problems. There are several key steps to filing an effective complaint about a federal or private student loan.
The Most Common Complaints about Student Loans
Some of the most common complaints about federal and private student loans include:
- Incorrect application of the borrower’s payments. This can include complaints about a failure to apply a payment to any of the borrower’s loans, applying a payment to accrued interest instead of the principal balance of the loan, and a failure to apply an extra payment to a specific loan (e.g., the loan with the highest interest rate).
- Lack of accommodations for a borrower’s financial difficulty. This can include complaints about a refusal to reduce or suspend the monthly loan payments, a lack of alternate repayment plan options, a refusal to reduce the interest rate, a refusal to cancel all or part of the borrower’s debt and a refusal to provide a reasonable lump sum settlement for the borrower’s debt.
- Lack of appropriate accommodations for a borrower’s situation. This can include complaints about the lender or servicer steering the borrower into forbearance instead of an alternate repayment plan.
- Misleading or inaccurate information. This can include complaints about the lender or servicer misleading the borrower about the amount of savings from refinancing their student loans, misleading the borrower about the borrower’s eligibility for public service loan forgiveness, and failing to provide the borrower with information about important loan terms (e.g., payment amounts, total payments, and payment due dates).
- Problems affecting cosigners. This can include complaints about cosigners not receiving copies of monthly loan statements, cosigners not receiving timely notification about late or missing loan payments, and the difficulty in qualifying for cosigner release.
Complain First to the Lender
Always start with lender. A complaint will be more powerful if you complained to the lender and failed to obtain satisfaction than if you did not give the lender a chance to fix the problem.
Before you call the lender’s customer service number, write down a short summary of your complaint and what you would consider to be a reasonable solution.
Call the Lender’s Call Center
When calling a lender’s customer service number, keep detailed notes concerning the time and date of your call, the telephone number you called, the name of the customer service representative(s) to whom you spoke and important aspects of the conversation. Such contemporaneous notes may be useful later.
When speaking with a representative at the lender’s call center, describe the problem and ask for a specific solution. The call center staff may be authorized to make certain accommodations to resolve a borrower’s complaint. If the call center representative is unable or unwilling to address your problem, ask to speak with a supervisor. Sometimes, supervisors have greater authority to resolve a complaint than front-line staff.
If the customer service representative offers an accommodation that is not satisfactory, say so. If they repeat the same unacceptable solution, repeat that it is not a satisfactory resolution of the problem. Be prepared to repeat this as many times as possible. If you are disconnected, call back.
Call the Lender’s Ombudsman
Many lenders have an ombudsman whose role is to resolve problems. The lender’s ombudsman usually has greater training and expertise than the call center staff.
This list contains links to the ombudsmen for the largest lenders and servicers. If your lender isn’t listed, search the lender’s web site for “ombudsman” or “complaint.” You can also call the lender’s customer service number to ask how to file a complaint.
- Educational Credit Management Corporation (ECMC)
- Great Lakes
- National Student Loan Program
- Sallie Mae
- Texas Guaranteed Student Loan Corporation (TG)
How and Where to Complain
Depending on the type of student loan you have and who the provider is, there are a few different places you can file a complaint.
U.S. Department of Education
The U.S. Department of Education provides an online form where borrowers can give feedback about their federal student loans. You can also file a complaint anonymously, but it’s better to login in with your FSA ID to link the complaint to your student loans. This will help the U.S. Department of Education identify your servicer.
From there, the borrower chooses between three complaint categories:
- Applying for aid
- Receiving aid
- Repaying aid
Each category will have a series of subcategories. Once the borrower reaches the final stage, they’ll have the ability to write their complaint and upload any relevant documents.
Consumer Financial Protection Bureau (CFPB)
Borrowers with federal and private student loans can complain about them on the Consumer Financial Protection Bureau (CFPB) web site or by calling 1-855-411-2372. The CFPB regulates financial products and services.
Even if you’ve already filed a complaint with your lender and/or the U.S. Department of Education, you can still file a separate complaint with the CFPB. The U.S. Department of Education and the CFPB do not necessarily share complaint data, so it makes sense to file in both departments.
Federal Student Aid Ombudsman
If you’ve already filed and received a response to your complaint from the U.S. Department of Education, you can issue an appeal with the Federal Student Aid (FSA) Ombudsman.
The impartial ombudsman can help with incorrect balances, problems with loan forgiveness and issues surrounding deferment or forbearance.
Complaints about Collection Agencies
Borrowers who wish to complain about a collection agency should contact the U.S. Department of Education’s Default Resolution Group (1-800-621-3115).
For issues relating to the Fair Debt Collection Practices Act (FDCPA), borrowers can also contact the Federal Trade Commission (FTC), who has oversight over the FDCPA. Although the U.S. Department of Education is not subject to the FDCPA, the collection agencies, servicers and other contractors who manage the Direct Loan program are subject to the FDCPA.
Veterans who are attending or attended a college through the G.I. Bill can file a complaint with the VA GI Bill Feedback System at the U.S. Department of Veterans Affairs (VA).
Military spouses with a MyCAA scholarship or veterans with Military Tuition Assistance can file a complaint through the U.S. Department of Defense (DoD).
Better Business Bureau
Filing a complaint with the Better Business Bureau (BBB) should be considered if all other approaches have failed to yield a satisfactory solution. Lenders who maintain an A rating or who are BBB accredited are more likely to respond to a complaint filed with the BBB.
Complaining on Facebook, Twitter or other social media is generally not effective unless you have a big following, your complaint goes viral or your complaint is picked up by news media. Otherwise, public shaming is rarely effective.
How to Write an Effective Complaint
Boston-based student loan lawyer Adam Minsky advises borrowers to be detailed and thorough when filing a complaint. Include your full name and account number in every written complaint to make it easier for customer service representatives to find your account. Also include your mailing address and other contact information. Be concise, but remember to state any relevant details, even if they might seem redundant. Do not exaggerate.
Writing an angry letter might help you vent, but it won’t lead to a solution. Keep calm and be polite. Do not make threats. Do not write the complaint letter in all capitals. Be professional.
State what you would consider to be a satisfactory resolution of your complaint.
State a time limit for the lender or servicer to respond to your complaint. For example, write “Please respond by <specific date>.” Give them a reasonable amount of time, such as 2-4 weeks.
Implicit in this advice is the idea that a written complaint may sometimes be more effective than a complaint transmitted by email or other electronic means, since it is harder to ignore. But, a written complaint can also be lost. So, it is best to submit a complaint both online and in writing.
Provide copies of documentation with your complaint letter. Do not send originals.
Check the spelling and grammar in your complaint letter before mailing it. A letter filled with spelling and grammar errors will give a bad impression and will be less effective.
Send the letter with delivery confirmation or by certified mail, return receipt requested. This will provide you with proof that the letter was received by the lender or servicer.
Follow-up on Your Complaint
Remember that your responsibility in a student loan dispute doesn’t end when you file a complaint. Be persistent.
“Follow up regularly via phone, and escalate to a manager if there is no progress,” Minsky said.
Set up regular calendar reminders on your phone or computer to remind yourself to call if you haven’t heard back in a while. Don’t forget to file complaints with multiple departments if it’s relevant. Escalate the complaint up the chain of command if you do not get a response or if the response is not satisfactory. Remember, the squeaky wheel gets the grease so don’t feel bad for making a lot of noise.