Borrowers Struggle to Connect with Loan Servicers Ahead of Federal Student Loan Restart
As the deadline for federal student loan payments to restart approaches, many borrowers are facing difficulties in reaching their loan servicers. Some individuals have reported waiting for hours on hold to obtain information about their outstanding balance, due dates, or to make early payments and avoid accruing interest. The situation has been exacerbated by the sporadic downtime of servicer websites, such as Aidvantage and Nelnet, due to the high volume of borrowers attempting to access their accounts.
Danika Wahlin, 28, is uncertain about her monthly payment amount under the new income-driven payment plan called SAVE (Saving on a Valuable Education). When Wahlin logs into her loan servicer, EdFinancial Services, she is unable to find the information she needs. EdFinancial is currently transitioning to a new loan servicing platform and has informed Wahlin that her loans are still in the process of being transferred. The uncertainty about her payment amount has caused significant stress for Wahlin and her wife, as they are already on a tight budget due to their combined student debt from undergraduate and graduate school.
Despite CNN’s request for comment, EdFinancial, Nelnet, and Aidvantage’s parent company Maximus did not respond. The Department of Education also did not immediately provide a comment. Bringing 28 million borrowers back into repayment simultaneously is an unprecedented endeavor and was expected to encounter obstacles. Although interest has already resumed, the exact due date for monthly payments varies for each borrower and will commence in October. Loan payments will be made to student loan servicers hired by the Department of Education, as was the case before the pandemic-induced freeze. However, most federal student loan borrowers have not made payments in over three years. Consequently, those who finished school during the pause are now facing their first payments. Additionally, many borrowers have different loan servicers from their previous payment period due to contract terminations over the past three years.
Furthermore, despite the increased workload this year, the Federal Student Aid office, responsible for overseeing the financial aid system, received approximately $800 million less funding from Congress than requested by the Biden administration. This budgetary constraint has further complicated the repayment process. Marlee Lane, for instance, spent a combined four hours on hold with her loan servicer, EdFinancial, over two days. Lane intended to pay off her balance before payment restarts in October to avoid accruing interest in September. However, she encountered difficulties making a payment through the servicer’s system. Lane hoped to qualify for President Joe Biden’s student loan forgiveness plan, but the program was struck down by the Supreme Court in June.
Danielle Dodder, 48, has also faced challenges in contacting EdFinancial’s customer service representatives. While Dodder can access her upcoming payment information, the amount due is unexpectedly higher without any explanation. She expressed frustration with the lack of transparency in the process, as well as the confusion caused by the servicer’s prompt to recertify her income for her income-driven repayment plan. The Department of Education has stated that borrowers should not be required to recertify until at least six months after the pause ends. Income-driven repayment plans calculate monthly payments based on income and family size, regardless of the borrower’s debt load.
The experiences of borrowers like Wahlin, Lane, and Dodder highlight the challenges many individuals are facing as they prepare to resume student loan payments. The inability to connect with loan servicers, coupled with technical difficulties and unclear communication, has added stress and uncertainty to an already burdensome financial situation. As the deadline for federal loan repayment looms, it is crucial for loan servicers and the Department of Education to address these issues promptly and ensure that borrowers have access to accurate information and assistance.
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