How to Dispute Student Loans

There are many reasons why a borrower or cosigner might dispute student loans on their record. They want a solution to the problems they have experienced. Or, they want to hold the lender or servicer accountable for their missteps. In some cases, they want to rectify an error affecting their credit score and borrowing ability. 

But can you dispute student loans on your own? You wouldn’t be the first person to do so. Credit bureaus received over 280,000 complaints in 2020, with many complainants disputing student loans information, such as wrongfully reported late or delinquent payments.

If you’ve noticed any credit report errors regarding your student loans or improper conduct by your student loan servicer, keep reading. We’ll guide you through some common complaints about student loans and tangible steps on how to dispute student loans. 

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.
• Incorrect reporting to the credit bureaus. This can include reporting on-time payments as late, closed loan accounts as open, forgiven loans as delinquents, or loans that don’t belong to the borrower.

How to Dispute Student Loans: Where to Submit Complaints

• Start with the Lender or Loan Servicer

Always start with the lender, even if your complaint is related to your credit report. A complaint to the credit bureau down the line will be more powerful if you show evidence that you informed the lender of the issue. Here are a few ways to dispute student loans with your lender:

Call the Lender’s Call Center

Before you call the lender’s customer service number, write down a summary of your complaint and what you would consider a reasonable solution. Then, make the call.

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 your 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.

Make sure you keep notes detailing the time and date of your call(s), the telephone number you called, the name of the customer service representative(s) or supervisor(s) to whom you spoke, and important aspects of the conversation. Such contemporaneous notes may be useful later.

If you don’t resolve your issue with the lender’s call center, you can try the lender’s ombudsman.

Call the Lender’s Ombudsman or Office of Consumer Advocacy

Many lenders have an ombudsman whose role is to resolve complex problems. These departments usually have greater training and expertise than call center staff.

The following list contains links to the ombudsman or complaint agency for each of the largest lenders and servicers. If your lender isn’t listed, search their website for “ombudsman” or “complaint.” You can also call the lender’s customer service number to ask how to file a complaint.

• Pennsylvania Higher Education Assistance Agency (PHEAA)
• Educational Credit Management Corporation (ECMC)
• Great Lakes 
• National Student Loan Program (NSLP)
• Navient
• Sallie Mae
• Trellis Company

If you don’t have any luck with the servicer, your next step is to complain to the various US government bodies.

• File a Complaint with the US Government 

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 submit a complaint about federal 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 and provide quicker service.

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)

The Consumer Financial Protection Bureau (CFPB) regulates financial products and services. Student loan borrowers with federal and private student loans can complain about their lenders on the CFPB website. 

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.

For issues relating to the Fair Debt Collection Practices Act (FDCPA), borrowers can also contact the Federal Trade Commission (FTC), which 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.

US Department of Veteran Affairs

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).

• File a Complaint with the Better Business Bureau

You should consider filing a complaint with the Better Business Bureau (BBB) 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.

• Contact the Credit Bureau

This step is reserved for borrowers with complaints regarding inaccurate information regarding student loans on their credit report. If you’ve contacted your lender and filed complaints with their ombudsman and government bodies to no avail, it’s time to reach out to the credit bureaus. 

Write them a letter informing them of the error and include any and all documentation proving your case. 

Here’s one important tip on how to dispute student loans on your credit report: include copies of correspondence between you and the lender. This demonstrates your efforts to rectify the issue and the lender’s lack of cooperation. 

Here’s the contact information for each credit bureau:

• TransUnion 

P.O. Box 2000

Chester, PA 19016

• Equifax

P.O. Box 740256

Atlanta, GA 30374

• Experian

P.O. Box 4500

Allex, TX 75013

How to Dispute Student Loans with an Effective Letter 

Boston-based student loan lawyer Adam Minsky advises borrowers to be detailed and thorough when filing a complaint. Here are some steps to write an effective letter to your lender, credit bureau, or government body, and things to include in your letter:

1. Include personal information. Include your full name, mailing address, contact information, and account number in every written complaint to make it easier for customer service representatives to find your account. 
2. Use a calm tone. 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.
3. Get to the point. Be concise, but remember to state any relevant details, even if they might seem redundant. Do not exaggerate. State what you would consider a satisfactory resolution of your complaint.
4. Request a response. 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.
5. Provide evidence. Provide copies of documentation with your complaint letter, as well as copies of other complaint letters you’ve sent to other bodies. Do not send originals.
6. Proofread. 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 might look unprofessional.
7. Confirm receipt. 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.
8. Submit via email and regular mail. A written, mailed complaint may sometimes be more effective than a complaint transmitted by email, 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. 
9. Follow up. Remember that your responsibility in a student loan dispute doesn’t end when you file a complaint. Be persistent. Set up regular calendar reminders on your phone or computer to remind yourself to call if you haven’t heard back in a while. Follow up regularly via phone, email, and mail, and escalate to a manager if there is no progress,” Minsky advises.

The Bottom Line

Student loan errors and lender misconduct is stressful for any student. And you’d be surprised how common student loan errors are, from incorrectly reported missed payments to unfair lack of accommodation. 

Luckily, filing a student loan complaint is a straightforward process. Wondering how to dispute student loans effectively? First, inform the lender and try to solve the issue with their call center. If that doesn’t work, you can write an effective letter to the lender’s ombudsman, government bodies, and even the credit bureau.