Lack of communication from student loan officers leads to debt accumulation

• Some student loan borrowers have told Insider that they are having trouble getting help from their loan officers.
• Even though some are entitled to debt relief, they are accumulating more debt.
• Lawmakers have been pushing for officers to be held to account, but further reform is pending.
• See more stories on the Insider business page.

Charles Moore, 49, was on the phone for four hours with the company that collects its student loans.

Moore, who has over $ 50,000 in student debt, wanted to know why his loans and his wife’s were not consolidated or combined, and despite numerous attempts to contact American Education Services, which is collecting his loan payments. , he could not get a response. This means that they were paying the interest on two loans when they could have paid only one.

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

Student loan managers have been closely watched on Capitol Hill over the past decade for practices that have stalled borrowers, engaging in deceptive practices, with many borrowers taking out loans they cannot. never repay, among others.

Moore’s loans, along with 8.5 million others, are owned by the Pennsylvania Higher Education Assistance Agency (PHEAA), which just announced it was shutting down its lending 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 debt relief officials.”

Borrowers told Insider their debts continued to grow, simply because they couldn’t contact their agents for help. Here’s what these borrowers face and how lawmakers want to hold service providers accountable.

Moore and Lynda Costa, a 56-year-old borrower, are eligible for relief under various programs, but they told Insider they were effectively turned down because their agents just weren’t responding.

To benefit from lower monthly payments on his student loans, Moore first sent in documents in 2007 for his income-based repayment plan. He said he never had a response from his duty officer on the documents he submitted and that his monthly payments continued to rise, even though he had gone through periods of unemployment.

“I never got a denial letter, never got a response as to why I was turned down, nothing,” Moore said. “It’s a really frustrating process. I had to submit documents over and over again. And finally, we got to the point where we were falling behind on our payments.”

Costa told Insider that she has reduced what is now $ 41,000 in debt since 2005, even though, as a nonprofit worker, she qualifies for the Public Service Loan Forgiveness Program (PSLF ).

She said that for years she had tried to find out why she did not qualify, to no avail.

“It’s a vicious cycle,” Costa said. “Every year I have had zero relief, and it never really seemed like someone in the maintenance department was really working with you.”

Costa even sent a letter of complaint to Navient, the company that held her loans, detailing her “lack of attention” to her difficulty making payments and not offering debt relief options, and she couldn’t remember ever having received a response.

“It’s just very disheartening,” she said. “I’ve felt like I’ve been paying the $ 41,000 for years now, and it never seems to go away.”

Warren has stressed the need to reform unfair student loan practices for years. In April, Warren and John Kennedy, a senior member of the Senate Economic Policy Subcommittee, called on the CEOs of all student loan managers to 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 a complex federal student loan program,” a spokesperson told Insider, adding that more than half of federal student loans administered by Navient are enrolled in a program. reimbursement based on income.

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

PHEAA CEO James Steeley also testified at the April hearing, but last month Warren and Kennedy sent a letter to Steeley regarding “what appear to be false and misleading statements” of his testimony .

After shutting down its loan department, PHEAA’s director of media relations Keith New said in a statement that in the 12 years since the company accepted its federal loan service contract, the programs “have become more and more complex and difficult while the cost of servicing these programs have increased dramatically.

In the meantime, Costa said: “If you’re not well informed, don’t listen and pay attention to what’s going on, and continually call and bother your repairman. , there is simply no way to repay your loans. It seems impossible.