Lack of communication with students servicing the loan leads to the accumulation of debt


  • Some student loan borrowers told Insider that they are struggling to get help from their lenders.
  • While some are eligible for debt relief, they instead accumulate more debt.
  • Legislators insist on holding servants accountable, but further reform has not yet been completed.
  • See more stories on the Insider business page

Charles Moore, 49, spent four hours on the phone with the company that collects his student loans.

Moore, who has over $ 50,000 in student debt, wanted to know why his and his wife’s loans were not pooled or pooled, and despite numerous attempts to contact American Education Services, which collects his loan payments, he was unable to get an answer. This means that they paid interest on the sum of two promissory notes, when they could only pay on one.

“Nobody wants to help you,” Moore from South Carolina told Insider. “And you don’t know how to get help. Even if you go back and forth, the lender does not know what the service personnel is doing, and the service personnel does not know what the lender is doing. “

On Capitol Hill, over the past decade, student loan servicers have been under scrutiny for a practice that has baffled borrowers, misleading borrowers, among other things, taking on loans that they can never repay.

Moore’s loans, along with 8.5 million others, belong to the Pennsylvania Higher Education Promotion Agency (PHEAA), which just announced that closing their credit services in December. Massachusetts Senator Elizabeth Warren said these borrowers can now “breathe a sigh of relief” knowing that their loans will not be managed by a company that “has robbed countless government employees of debt relief.”

Borrowers told Insider that their debts continue to rise simply because they cannot turn to their service providers for help. This is what these borrowers are dealing with, and how legislators want to hold service providers accountable.

Both Moore and Linda Costa, a 56-year-old borrower, are eligible for assistance through various programs, but they told Insider that they were effectively turned down because their support staff were simply not responding.

To be eligible for lower monthly student loan payments, Moore submitted paperwork for his income-driven repayment plan for the first time in 2007. He said he had never heard of the paperwork he submitted from the service staff, and his monthly payments continued to rise even though he went through periods of unemployment.

“I never got a rejection letter, I never got an answer why I was denied, nothing,” Moore said. “This is a really frustrating process. I had to apply over and over again. And in the end we got to the point of delaying payments. “

Costa told Insider that she has cut $ 41,000 in debt since 2005, although as a nonprofit worker she is eligible for the Public Service Loan Forgiveness (PSLF) program.

She said that for years she had been unsuccessfully trying to figure out why she was inadequate.

“It’s a vicious circle,” Costa said. “Every year I have not been relieved, and it never looked like any of the service staff were really working with you.”

Costa even sent a complaint letter to Navient, the company that held her loans, detailing her “inattention” to her difficulties in making payments and her inability to provide debt relief options, and she didn’t remember ever getting a response.

“This is very discouraging,” she said. “I feel like I’ve been paying out $ 41,000 for years and it seems like it will never go away.”

Warren has stressed the need to reform unfair student lending practices for years. In April, Warren and John F. Kennedy, senior members of the Senate Economic Policy Subcommittee, invited supervisors of all student loan servants must testify. It was then that Warren told the CEO of Navient that he should be fired for misleading borrowers.

Navient supports student loan borrowers “by helping them navigate the complex federal student loan program,” an Insider spokesman said, adding that more than half of federal student loans served by Navient participate in the income-based repayment program.

The spokesman added that Navient offers a variety of “easy-to-use” tools and information, and the company can be easily contacted by phone, email or the Internet.

PHEAA CEO James Styles also testified during the April hearing, but last month Warren and Kennedy sent a letter Styles regarding “what appears to be false and misleading” statements from his testimony.

Following the termination of the loan service, PHEAA’s director of media relations, Keith New, said in a statement that in the 12 years since the company accepted the federal loan service contract, programs “have become increasingly complex and difficult, while costs to service these, the number of programs has skyrocketed. ”

Meanwhile, Costa said: “If you are not aware, do not listen and pay attention to what is happening, and you do not constantly call your service personnel and do not bother them, there is simply no way to pay off your loans. It seems impossible. “

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