Here’s How To Fix Student Loans

A new report has some targeted proposals to fix student loans.

Here’s what you need to know.

Student Loans

The latest student loan debt statistics show that 45 million borrowers collectively owe $1.6 trillion of student loan debt. The Student Borrower Protection Center (SBPC), a non-profit advocacy group, issued a new report with prescriptive remedies to address student loans. Here are some of the proposals, according to the report, to protect student loan borrowers:

1. Student Borrower’s Bill of Rights

As its name suggests, a student borrower bill of rights provides more consumer protection to student loan borrowers. To date, “nearly a dozen” states have strengthened their state laws to have more regulatory oversight over student loan servicers to combat fraud and illicit practices. More protections for student loan borrowers also would empower state attorneys general as well as banking and securities regulators, says SBPC, and protect borrowers against “predatory” schools and improper student loan debt collection practices. The report also calls for a federal Student Borrower’s Bill of Rights, which can be done through presidential memorandum.

2. Oversight of student loan servicers

The SBPC wants increased oversight over student loan servicers, which are companies that manage and service student loans. Simply put, your student loan servicer is the company to whom you make student loan payments and who you contact for customer service questions about your student loans. The SPBC says that more oversight will put power back in the hands of student loan borrowers. One place regulators should start, according to the report, is requiring student loan servicers to produce student loan documents and records when requested by regulators and law enforcement. The SBPC says a 2017 memorandum from the Office of Federal Student Aid —which is part of the U.S. Department of Education—limits the government’s ability to regulate student loan servicers effectively.

3. Empower the Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau, or CFPB, was created during the Obama administration to help consumers and to enforce consumer protection laws. According to the report, the CFPB has lost significant power over the past several years, resulting in weaker consumer protections for student loan borrowers. For example, the report alleges that the CFPB failed to investigate the U.S. Department of Education, which is led by Secretary Betsy DeVos, for the high rejection rate for the Public Service Loan Forgiveness program. The Education Department previously has said that Congress, not the Education Department, created the student loan forgiveness program in 2007 and is responsible for the program requirements (including any changes). Student loan forgiveness has been a hot topic for student loans, including in the latest stimulus package. A stronger CFPB would reduce abuse and fraud in the student loan industry, according to the report, and ensure that consumers get a fair shake.

How to make a student loan complaint

How do you make a student loan complaint? If you have an issue with your student loans and want to file a formal complaint, you can contact:

1. Your lender
2. Your student loan servicer
3. State Attorney General
4. State Department of Education
5. U.S. Department of Education
6. Federal Trade Commission (FTC)Consumer Financial Protection Bureau

If your issue cannot be resolved telephonically, file your complaint in writing. Provide supporting documents and a clear explanation of what transpired. There are many issues that may cause you to file a student loan complaint, including incorrect late fees, incorrect payments, improper student loan debt collection or other fraudulent or abusive practices. Most lenders and student loan servicers act in good faith and should promptly correct any mistakes. If this is not the case in your situation, make sure you understand your rights.

Pay off student loans

Dealing with student loan servicers is only part of the process. Make sure you have a student loan repayment plan. Here are few options, all of which have no fees:

• Student loan refinancing (get a lower rate, save money)
• Student loan consolidation (get organized)
• Income-driven repayment plans (payment plan for federal loans)
• Student loan forgiveness (public service)

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