When you hit a hiccup with your student loans, you should be able to contact your servicer to get prompt assistance and straightforward answers. But too often, the opposite is true. Just ask the borrowers who’ve submitted over 50,700 student loan complaints to the Consumer Financial Protection Bureau (CFPB) in the past six years.
When you’re dealing with an unresponsive student loan servicer or creditor, it can help to get things in writing. Use these sample letters to resolve six common student loan issues, from misapplied payments to debt in collections.
1. Instruct your servicer how to apply student loan payments
If you’re paying more than your monthly minimum on student debt, make sure your servicer knows how to apply extra payments. Without clarification, a servicer might apply an extra payment to the following month’s statement or divide it across multiple loans when you intended to target just one.
To avoid or clear up such issues, you can send instructions to your servicer about how it should apply extra payments. Simply download, complete, and mail the CFPB’s sample letter found on this page.
2. Ask how you can lower your payments
If you’re struggling to keep up, you might wonder if there’s a way to reduce your monthly student loan payments. Federal student loan borrowers can enroll in income-driven repayment plans or request to defer payments.
But if you have private student loans, it can be harder to find out what your options to lower your monthly payments are. Visit this CFPB page and use the sample letter linked there to request clear answers from your private lender.
3. Change your automatic withdrawal settings
Setting up automatic withdrawals for your student loan payments can keep you from missing a payment and even earn you an interest rate discount. When you set up these automatic payments, you must give your servicer permission to withdraw funds directly from your bank account every month.
But what if you’ve encountered problems with automatic payments? This CFPB page lists sample letters that can help you take the following actions:
- Cancel automatic payment withdrawals. You can send a letter to your student loan servicer revoking your authorization to automatically debit your bank account. For good measure, send a letter to your bank to notify it of the change as well.
- Request a one-time block of an automatic payment. If you want to skip just one automatic payment, you can send a stop-payment order to your bank.
- Dispute an unauthorized transfer. If you believe your servicer debited your account in error, it’s best to try to resolve the issue with your servicer first. But you also can send a letter to your bank to notify it of an unauthorized withdrawal from your account.
4. Request information about cosigner release
It’s common for students to get private student loans with the help of a cosigner. But after you graduate, it might not make sense to have your cosigner listed on the account anymore.
Some private lenders are willing to release a cosigner from legal responsibility for the debt. The CFPB provides two sample letters to request more information about cosigner release — one for primary borrowers and another for cosigners.
5. Dispute credit report errors
It’s not uncommon to find mistakes on your credit report, which could affect your credit score and eligibility for new loans. That’s why it’s a good idea to request and review your credit report regularly.
You can dispute credit report errors with the help of these sample letters:
- Customize this letter from the Federal Trade Commission (FTC) and send it to the creditor that provided the incorrect information.
- Fill out and submit this sample letter to any credit reporting agencies that list the error on your credit report to notify them of the mistake.
6. Deal with debt in collections
Dealing with student loan servicers is hard enough, but the situation can get even tougher if your account is sent to collections. Not only can it damage your credit, but debt collectors can be annoying or even aggressive.
As a consumer, however, you have a right to be treated fairly. On this page, the CFPB provides several sample letters that can help you deal with debt collectors. You can:
- Request more information or proof of the debt. Debt collectors must provide proof that a debt they’re attempting to collect is, in fact, yours. You can send a letter to request documentation of a debt or even dispute that a debt belongs to you.
- Limit how debt collectors can contact you. If you set rules about when and how debt collectors can contact you, they must abide by them. You can provide instructions on when debt collectors are allowed to contact you or tell them to cease contact altogether. If you have a lawyer, you can direct debt collectors to correspond with your attorney instead.
Use the above sample letters from the CFPB and FTC to get the help you need. Customize these templates and then send them out to request information, make changes to your account, or enforce your rights as a borrower.
Hopefully, your letter will do the trick. But why not be prepared in case it doesn’t? While you’re waiting for a response, find out how you can escalate and resolve problems with your student loan servicer.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 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 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.54% APR (with Auto Pay) to 7.27% 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 March 18, 2019, 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 0318/2019. 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 firstname.lastname@example.org, 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.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed 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.
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.
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.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.5% effective February 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.54% – 7.12%3||Undergrad & Graduate|
|2.54% – 7.27%1||Undergrad & Graduate|
|2.67% – 8.96%4||Undergrad & Graduate|
|3.23% – 6.65%2||Undergrad & Graduate|
|2.69% – 7.43%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|