The Student Loan Ranger occasionally receives questions from readers who have a complaint about an action taken by their student loan holder or loan servicer and want advice about whether the action was valid — and how to resolve the issue if it was not.
While it can be very difficult to understand individual situations without access to private information, we can offer some broad advice about what to do in such cases. The Student Loan Ranger is not an attorney and does not offer legal advice. We can, however, provide some tips about steps you can take to get a student loan dispute resolved:
— Start by contacting your student loan servicer or holder.
— Put your questions and concerns in writing.
— Know when to escalate the issue.
— File a federal complaint.
If you suspect that you have been a victim of student loan fraud or that your personal information has been compromised in any way, there are additional steps that you should take to protect yourself. Review them before contacting your student loan servicer.
Start by Contacting Your Student Loan Servicer or Holder
If you ever feel that your student loan servicer or holder of your loan has taken an action that you do not understand or disagree with, your first step should be a phone call to get more information. Mistakes can happen — whether on your end or theirs — and many complaints are easily and quickly resolved with a phone call.
Be prepared with your account information, any documentation you have that can help you make your case and some basic questions about the action. Be polite, clear and concise, and be sure to let the customer service representative know what specific outcome you would like to achieve.
While you speak with the representative, take notes about the conversation. Ask what steps are needed to resolve the problem and be sure you understand any actions that are necessary on your end. Write down anything that the representative agrees to do on your behalf and ask for a confirmation number or email, as well as a date by which you should follow up to be sure the complaint was resolved.
For example, if you think that you made a student loan payment that was not recorded or was misapplied, you should have on hand your bank account statement or other documentation related to the payment. Ask the representative how he or she suggests you resolve the discrepancy and write down the response.
If the representative agrees that a payment should be applied differently than it has been, for example, be sure to get the information you need to confirm the issue has been handled.
Put Your Questions and Concerns in Writing
If your complaint is not resolved by an initial phone call or you disagree with the proposed solution, you should begin to handle the issue in writing as much as possible.
Save copies of everything you send and receive, which will ensure that you have proof of what has happened and agreed-upon next steps. This is important because if you get to the last suggested step below and need to file a federal complaint, the burden of proof will be on you.
Disputes can be sent to the loan servicer’s or holder’s general customer service address, which you can find on their website or by calling them. Like you did during your initial phone call, provide a clear, concise description of the situation and be specific about how you would like the situation resolved. Include any previous correspondence or notes about previous interactions with customer service, as well as any documentation that you reference in your email.
Make sure that what you are asking your loan holder to do is legal and does not violate the terms of your student loan promissory note or contract. In other words, you want to be sure that your complaint is not with something that you agreed to when you accepted the loan, even if the action taken seems unfair to you now.
For example, a customer care or ombudsman office will not be able to help you if you feel that your monthly interest rate is too high, because you agreed to these terms when you accepted the loan.
Organizations generally pledge to respond to inquiries and complaints sent to a general inbox within 30 days. Be sure to follow up promptly as needed.
Know When to Escalate the Issue
If efforts to resolve your problem are unsuccessful with customer service, you can try to escalate the issue to a customer care or ombudsman office, if your loan holder has such an office. These offices are set up to ensure that disputes are fully investigated and that the dispute process is handled thoroughly and accurately.
If your dispute involves a federal student loan, the steps you should take before escalating a complaint to the Federal Student Aid Ombudsman Group are outlined online.
You can call your loan holder to find out whether escalating the dispute is an option, or check the National Consumer Law Center’s Student Loan Borrower Assistance website. Again, follow up promptly as needed and provide any documentation that can help your case. If you need a copy of your loan promissory note or contract, contact your loan holder or servicer for it.
File a Federal Complaint
If it is a private student loan and you have tried all avenues to work with your loan holder but are still unsatisfied with the result, you can submit a complaint to the Consumer Financial Protection Bureau, or CFPB. The bureau provides oversight of many financial products, including private student loans, and can assist with disputes.
Federal student loan borrowers also have the option of filing a complaint with the bureau.
You can submit a complaint through the bureau’s online database and follow the process of the dispute. This is where your written documentation will be useful because you will want to show what has already been presented and the response you received.
Again, this should be the very last step after you have exhausted all other options. If the CFPB finds that your loan holder or servicer has not had the opportunity to resolve the dispute, the bureau will likely refer you back to the loan holder or servicer. Similarly, the bureau will not be able to help if you are disputing an action that is within the terms of your agreement.
Most formal disputes can be avoided with a phone call or by ensuring you understand the terms of your promissory note. Make sure you follow this process in order to avoid filing an unnecessary complaint that won’t get you the resolution you desire.
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