You probably don’t want to give a lot of thought to your loan servicer. After all, it’s the company that takes a big chunk of your paycheck every month — you likely don’t want to hear more from it. But your loan servicer can play an important role during your repayment term, helping you find a payment plan that works for you, or even allowing you to postpone your payments while you get back on your feet.
Unfortunately, not all loan servicers have excellent customer service. As of October 2017, the Consumer Financial Protection Bureau (CFPB) said it received over 50,000 complaints about student loan companies.
Find out if your loan servicer is on the list and what you can do if you want to make a switch.
The 5 worst student loan companies based on customer complaints
The CFPB student loan ombudsman is responsible for investigating complaints and helping borrowers and loan servicers reach a resolution. According to the latest ombudsman report, these are the five companies with the most complaints.
Navient, a company which services both federal and private student loans, had over 10,000 customer complaints between September 2016 and August 2017.
Borrowers aren’t alone in their concerns either. Last year, the federal government announced that they were suing Navient for allegedly mishandling student loan payments and not informing borrowers about alternative payment options.
According to the CFPB, Navient didn’t apply borrowers’ payments properly or ignored customer requests on how to handle extra payments. When borrowers were facing a financial crisis, such as a job loss, Navient allegedly entered their loans into forbearance rather than informing them about income-driven repayment (IDR) plans.
Navient has denied these allegations, however.
With nearly 2,000 customer complaints, American Education Services, often referred to as AES, is second on the list.
The Consumer Complaint Database, a publicly accessible database of all complaints the CFPB receives, shows that the majority of complaints about AES are about how payments are handled.
Some borrowers claimed that they made extra payments toward their loans but that AES applied those payments toward the interest that accrued, rather than the principal. This slowed down how quickly they paid off their loans.
The second-most-common complaint about AES was from customers who said they received bad or incorrect information about their loans.
Nelnet is one of nine federal loan servicers handling Direct and Perkins student loans. Between September 2016 and August 2017, the CFPB received 629 complaints about Nelnet. Nelnet recently purchased Great Lakes, another federal loan servicer, which also received numerous complaints.
Like with Navient and AES, most of the complaints about Nelnet surrounded the handling of payments and the accuracy of information given by Nelnet’s customer service team. Many claimed that Nelnet failed to inform them of their IDR plan options, wrongfully entered their loans into deferment, or misled them about their eligibility for Public Service Loan Forgiveness.
4. Wells Fargo
Wells Fargo is a private loan lender that has come under intense scrutiny for their handling of customer outreach.
In 2017, the company faced a class-action lawsuit that alleged Wells Fargo used an automated phone system or prerecorded message to call borrowers without first getting their consent. Wells Fargo has settled the lawsuit but still denies the allegations.
The loan servicer received over 300 other complaints from borrowers, according to the ombudsman report. Common complaints involve how payments were handled and issues with fees.
5. Conduent/ACS Education Services
Conduent, formerly known as ACS Education Services, received 192 complaints. The most common issue cited was problems with customer service. Borrowers said that they had trouble getting a hold of a representative to resolve issues with payment plans.
In 2016, the company faced a $2.4 million lawsuit from the Massachusetts attorney general. The lawsuit claimed the Conduent delayed processing applications for IDR plans and charged excessive late fees. Conduent settled the lawsuit without admitting liability.
What to do if your loan servicer is on the list
Complaints about student loan companies are common, but that doesn’t mean you have to put up with poor service. If you’re unhappy with your loan servicer, there are things you can do to resolve the problem or get a new servicer.
Keep good records
Whenever you contact your loan servicer, make sure you document everything. If possible, handle any issues through email — that way, you’ll have written proof. If you do use the phone, write down the date, time, and name of the representative you contact.
If there are any discrepancies later on, having those records can help you resolve any issues quickly.
File a complaint
If you have a problem with your loan servicer and can’t come to a resolution, you can submit a complaint to the CFPB student loan ombudsman. The ombudsman is a neutral third party who will investigate and record your complaint.
Refinance your loans
If you can’t deal with your loan servicer any longer, one option to consider is refinancing your loan. Student loan refinancing allows you to work with a private lender to take out a new loan for the amount of some or all of your old ones. After you refinance, you’ll have a new loan servicer and won’t deal with the previous one anymore.
Refinancing is a big decision — especially if you have federal student loans, since you’ll lose certain benefits and protections if you switch to a private lender — but it can be a good idea if you’re looking for a more responsive and helpful servicer.
Managing your student loans
Your loan servicer can be a huge help to you during your repayment period. Or, it can cause more headaches as you try and navigate the student loan system. By knowing the common complaints and what options you have, you can better handle any issues and shop around for a new servicer, if necessary.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.48% – 6.25%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|