In federal fiscal year 2014, the Consumer Financial
Protection Bureau received more than 5,300 complaints from consumers about
their private student loans. The Department of Education ombudsman handled
approximately 7,800 federal student loan disputes during a similar period.
These numbers do not include those student loan borrowers who chose to fight
their battle themselves, directly with the loan holder or through the court
system.
The proposed student loan complaint system within the Obama
administration's Student Aid Bill of Rights and the more recent announcement
from the Consumer Financial Protection Bureau of a student loan servicer survey
are indicators that policy makers and program administrators recognize the
issue and are trying to improve the borrower experience.
But nobody's perfect, so even if student loan servicing
reached a 99.9 percent accuracy rate, disputes would still come up. Regardless
of the problem, the important thing is understanding how to get your student
loan dispute resolved.
It's All in the Presentation
If you have a dispute with your student loan servicer, how
you present that dispute can make all the difference in the world. Your first
reaction might be to call, demand a supervisor, and if that doesn't work,
demand the next level up.
While that could work, you should handle disputes in writing
as much as possible to ensure that you have proof of what has happened and what
has been agreed to.
Aim to present the servicer with a clear, concise and polite
listing of the facts of the situation, as well as a specific, reasonable
outcome you are trying to achieve. Sending the dispute in writing also ensures
that you are able to present any additional documentation you might have to
back up your claim or request.
Make sure you keep copies of everything you send and receive
during the dispute process. If it comes to it, the burden of proof will be on
you.
Finally, ensure that what you are asking for is reasonable,
or even legal. Federal student loans are heavily regulated, so the loan holder
may not even be allowed to do what you are asking. It's sometimes a good idea
to go back through the promissory note terms before filing a dispute to see if
that explains the problem.
Who Do I Complain To?
Where you send your dispute can be almost as important as
what you send. Most disputes can be sent to the servicer's general
correspondence address that can be found on their website. You can expect the
loan holder to respond within 30 days.
If you are not satisfied with the response, most loan
holders have an escalated customer care or ombudsman office. These areas are
generally charged with being neutral parties whose goal is to ensure that the
dispute is fully vetted and that the dispute process is handled thoroughly and
accurately.
What to Do If You're Still Unhappy
If you think the answer you get from this office is still
incorrect, advocates would recommend reaching out to a senior staff member such
as a vice president or CEO of your student loan holder. But in the case of a
student loan dispute, doing so may just cause your dispute to loop back around
to where it started. Instead, it might be time to forward your dispute to the
organization that provides oversight to the loan holders themselves.
The federal Department of Education maintains an office of
the office of the ombudsman to help resolve federal student loan disputes. If
there is a resolution to be had, this team will find a way.
Keep in mind that this group should be considered a last
resort rather than a first one. If they find that you haven't given your loan
holder the opportunity to resolve the dispute on its own, the ombudsman may
just forward your dispute directly to the loan holder to give them that
opportunity. This is where your paper trail will come in handy, as it will
allow you to show the ombudsman what has already been presented and the
response you received.
Private and federal student loan borrowers also have the
resource of the Consumer Financial Protection Bureau to help them resolve
escalated defaults. Consumers can submit complaints through their online
database and use that same database to follow the process of the dispute.
Some consumers have had success contacting their members of
Congress for assistance. While this can be very effective, remember that they
can only request or effect change within existing law or regulation. If your
dispute is that your interest rate is too high, and that rate is set in federal
law, your congressman isn't going to be able to force your loan holder to
change it.
In the end, most disputes can be avoided by ensuring you
understand the terms of your student loans in India
before you even sign the promissory note. Many disputes originate from the
stress of a consumer realizing that they may not be able to afford their loan
payments, or by how long it may take to pay in full.
Knowing what you are getting into ahead of time can help you
plan and understand how these products work, and avoid future disputes. But if
there is a mistake, knowing an effective process for resolving those mistakes
is half the battle.
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