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.
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