Skeptical About CFPB Student Loan Oversight? Here Are Other Places to Seek Help Instead

 December 28, 2019
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In the past, if you had a problem with your student loan servicer, you could usually look to the Consumer Financial Protection Bureau (CFPB) as an unbiased source of help.

Unlike the Department of Education (federal loans), the CFPB has no stake in your debt repayment. And unlike banks (private student loans), the CFPB was built to protect you, not to profit from you.

In the past year or so, however, the consumer watchdog has come under criticism that it’s not looking out for borrowers. And this has been just one of the CFPB’s problems. There were concerns about its funding, particularly last year when its acting chief requested no operating funds for the agency, citing the budget deficit.

Meanwhile, the Supreme Court has agreed to rule on the constitutionality of the CFPB’s leadership, with uncertain consequences for its future.

Let’s take a look at the current situation for the bureau and then go over five other places to find the help you might have been seeking from the CFPB:

  1. Federal student aid (FSA) ombudsman
  2. State student loan ombudsman
  3. Your private lender
  4. Student loan lawyer or counselor
  5. Contact your representative in Congress

What’s happening over at the CFPB?

You might actually trace the beginning of the CFPB’s handicapping to September 2017, when the new administration’s Department of Education said it would no longer assist the CFPB’s efforts to combat student loan fraud.

Over the last 12-plus months, other developments have tarnished to the agency’s reputation, including:

5 places — other than the CFPB — to seek student loan help

With all that said, contacting the CFPB could still be worth your while, if only to have your voice heard by ombudsman Cameron or recorded in the agency’s vast database of student loan complaints. The CFPB also offers helpful resources such as free forms to use when enrolling in IDR.

Still, if you’ve lost confidence in the CFPB’s ability or willingness to resolve your student loan woes, consider these five alternative sources of help. They can be especially useful if your servicer has proved to be unhelpful.

1. Federal student aid (FSA) ombudsman

Like Cameron’s office at the CFPB, the FSA Ombudsman Group was established to be all ears to your student loan concerns. If you’ve failed to work things out with your federal loan servicer, the ombudsman could mediate without serving as your advocate. You can contact the group at 1-877-557-2575 or write using the FSA Feedback System.

Beyond the Ombudsman Group, you might try another of the FSA’s toll-free phone number for more specific complaints, including:

For help with… Contact… Dial…
IDR, Direct Loan Consolidation, Parent PLUS loans Student Loan Support Center 1-800-557-7394
Public Service Loan Forgiveness FedLoan Servicing 1-855-265-4038
Borrower defense to loan repayment Borrower Defense Customer Support 1-855-279-6207
Loan defaults, garnishments Default Resolution Group 1-800-621-3115

2. State student loan ombudsman

While the Federal Student Aid office can only assist with your federal loan frustrations, your state’s ombudsman (if it has one) could help sort out issues relating to your private student loans too.

Illinois, Kentucky, Michigan, Missouri, New York, Utah and Virginia are among the states with an ombudsman on the staff of its higher education authority. Contact your state agency via the Department of Education’s directory.

The benefit of working with your state’s ombudsman is they could turn your troubles into legislation. Virginia’s newly-installed advocate, for example, has no regulatory power of its own but could contact the state’s attorney general’s office on your behalf.

3. Your private lender

If you’re experiencing strife with your private student loan company — whether it’s a bank, credit union or online lender — you might have already tried its customer service department without success.

Unfortunately, there’s no federal ombudsman for hearing private student loan cases, other than the CFPB’s. Reconnecting with your private lender then is the first, albeit undesirable, step before considering outside help.

If you have a minor issue with your loan but don’t trust your lender to handle it correctly, put in the time to research your options. You might phone your lender again, this time dictating how you want payments applied to your balance, for example.

For some borrowers who are creditworthy (or have a creditworthy cosigner), refinancing student loans is a good solution. It allows you to consolidate your debt, adjust your repayment timeline and, yes, pick a new private lender. (It’s not for every borrower, however, as refinancing would irreversibly turn your federal loans into a private loan, stripping away government-exclusive protections like IDR.)

4. Student loan lawyer or counselor

For more serious problems with your education debt, you might require a professional who provides one-on-one service. Hiring a student loan lawyer isn’t necessary for many borrowers, but it could prove useful in cases where you’re facing legal action or considering bankruptcy.

If you’re worried about cost, there are many ways to find free or low-cost representation. You could start your search with the National Consumer Law Center’s resources.

For anything less serious, such as affording your monthly payment, you might rely on a student loan counselor. Nonprofit organizations like American Consumer Credit Counseling feature individualized support, free of charge.

5. Contact your representative in Congress

If you’re concerned that the CFPB no longer serves as a reliable bridge between you and the government, you might cut out the middle man altogether.

Making your voice heard could be as simple as picking up the phone and dialing an elected official. Locate your representative or senator via GovTrack’s directory.

And, sure, the divisiveness of Congress doesn’t breed confidence either, but proactively reaching out at least beats waiting for mass forgiveness to arrive.

Get the help you need with your student loan debt

The past year’s headlines might have left you wondering: If you can’t trust the CFPB, who can you trust?

But whether you’ve lost faith in the CFPB or still see it as a valuable advocate, the fact remains: There are other resources for student loan assistance available. Now you know where to go to find them.

This blog does not provide legal advice. If you need legal advice, please contact an attorney directly.

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