Cross-posted from the CFPB’s blog.
Since we opened our doors, student loan borrowers have told us about some of the frustrations they sometimes face with their lenders, servicers, and debt collectors. Borrowing for college should be the best investment you’ll make, but for many Americans, paying off those student loans is a real challenge.
For several years, federal student loan borrowers have had the Department of Education’s Federal Student Aid Ombudsman to help bring their concerns to financial institutions. But for millions of students and their families, federal student loans don’t cover the full cost of college and they need private student loans to make ends meet.
However, private student loans – which don’t always carry the same consumer protections as federal student loans – have been overseen by a patchwork of government agencies. In the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress established an Ombudsman for private student loans within the Consumer Financial Protection Bureau to assist borrowers with private student loan complaints. This means a single federal agency is now responsible for watching out for all students and families who choose to borrow private student loans.
Today, we are open for business and ready to hear from you. To ask a question, file a complaint, or share your story: go to www.consumerfinance.gov/complaint or call our toll-free number at 1-855-411-CFPB.
If you file a complaint, we’ll work with your lender or servicer to get a response. While we certainly can’t make your debt disappear, we can help bring your concern to your financial institution’s attention. If you don’t have a specific complaint or question, but want to tell us what is – or is not – working in the student loan market, we invite you to tell your story.
And while the Consumer Bureau has only been open for a short time, we’ve been hard at work to gather the facts and provide tools to help you make good decisions about student loans. We launched an online tool, the Student Debt Repayment Assistant, to help you navigate the maze of student loan repayment options. We also launched Know Before You Owe: student loans and worked with the Department of Education to develop a draft “financial aid shopping sheet” for schools to improve the student loan information they give to students.
Our team at the Bureau will keep working to give you the tools and the information to make sound financial decisions on student debt – and to figure out your options in case things don’t go according to plan. These days, we all seem to know someone having a tough time with their student loans, so share this new resource by e-mail, Twitter, and Facebook (just use one of the buttons below). With your participation, we can help make the student loan market work better for all of us.
Rohit Chopra is the CFPB’s student loan ombudsman.
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why my loan is transferred from direct loan to Edfinancial service???
any one from department of education can answer this?
I called Direct loan and they said it is transferred by Department of Education?
why ?
why?
why?
I trust the US department of education, not third party… without my interest and authorization America is selling my loan to other company who has currently 33 complains in BBB
Same thing here. I got a letter to my loan is transferred to Edfianacial service from direct loan. Some body is playing this business there in direct loan or department of education. Should they be point out for justice.
If you go to BBB, you will see 33 Total Complaints about Edfinance service so why we obliged to refinance to this unknown third party.
http://www.bbb.org/knoxville/business-reviews/financial-services/edfinancial-services-in-knoxville-tn-90007321/complaints
G
Please respond to the other comment regarding Edfinancial. I got an email saying they are my new provider but I have heard nothing form Direct Loans about a change. This screams scam to me.
Me too! I’m fairly confident that the EdFinancial thing is legitimate but I absolutely hate the way this transition was handled. To make it worse, they just transitioned to the “myedaccount.com” site and that transition was bad because even the transfer page was badly coded and looked like it was set up by hacks. Now we’re being handed off to yet another website to login to? PLEASE someone clarify this.
Does the government sell loans to private companies? Edfinancial is claiming to be our new servicer. I think this is a scam. Why did you not give a reply to KM above? I will continue to send my money to the department of Education but I fear many people would fall for this fraud.
On January 16th, 2009 I appeared on 20/20 along with two other graduates, interviewed by Jon Stossel about our overwhelming student loan debts and the interest rates and unemployment that keeps us from repayment. I also today received a letter from Edfinancial exactly like the one described by KM. If America is selling our Federal debts to outside corporations, then we’re really in trouble. Our fight for student loan reform was a success, but if all of those loans are sold off, then we lose those protections and there are no limits to what a privatized corporation can do to us. I don’t know if this is fraud, but I am already fighting back. I have contacted the ABC news producer who got me on the show to follow up, and I have placed the information in the hands of a prominent leader of Occupy Wall Street. This news has not yet hit the streets, but soon it will, and it needs all the attention we can give it to expose this. If America is willing to sell us out, then what’s next on the privatization list? What other debts will it sell to sharks? This is turning into a Guido situation. Whereas we are (somewhat) protected by America, it’s as if they have turned their backs on us, sold us to headhunters and knee-breakers, and left us to die. This is very, very bad news. I know the big business/big government issue is a fierce debate, one that I will not address, but this type of merger has serious consequences for all Americans who are protected by government law for various debts. SERIOUS CONSEQUENCES. I’m asking you all to tell everyone you know. Go to Edfinancial’s website and you will see that some of their clients are our worst enemies including Chase, HSBC, USBank…it’s truly frightening. I don’t intend to pay them a dime. I will fight.
I rec’d a letter from a private company called EDFinancial Services that my Direct gov. loan cons. is being transferred to them (on the very day my Consolidated IBR PSLFP loan payment is due). During these times of one financial scam after another, I believe such notice of change of servicer should come from DIRECT, not the new servicer. How am I to be sure this is not a scam otherwise? Especially since I am directed in the letter to re-register & resubmit all of my personal information online for online access. I trusted that by consolidating with a government Agency program such as the DOEd DIRECT program, that I would be protected from predatory lenders & servicers – but now I see that may not be the case. Until student borrowers have the same protection under ALL consumer protection laws, these loans should NOT be farmed out to commercial servicers; I did not sign on for that & feel the Department of Education pulled a “Bait & Switch” on student loan borrowers. I fell for a similar scam by another well-known lender & had no consumer protection to demand proof of the claim; as a result, I ended up being forced paying for the same loan twice; to the legitimate lender as well as to the bogus claimant. To this day, I have yet to receive confirmation by 1099E that the bogus servicer rec’d full payment by DIRECT. In addition the servicer according their own admission, received payment AGAIN through their guarantor. I do not want to be put at risk of the same thing occurring again. Without consumer laws, student loan borrowers are essentially fed to the “wolves”.
We need more consumer friendly repayment options. Why should I consolidate my loans and pay essentially pennies on the dollar toward principal for each payment. Why not allow borrowers tackle repayment on one loan at a time? 1st calculate their total repayment amount using the traditional method. Then allow them the option of applying the payment to one of their loans at a time along with the interest on the remaining loans. Once each loan pays off let them either recalc the pmt based on the new, lower outstanding principal or continue the same pmt applying it to the second loan and so forth. And let them repay the unsubsidized loans first.
College costs are out of control. Students should not have to go into debt for life to get a college education. Look up the salaries of the individuals who work for colleges, they too are out of control. There is no reason that state supported colleges should be taking advantage of our children. Our state needs more educated individuals, students should not be priced out of being educated beyond high school. This will not help our country in the future. Students who have parents working and paying taxes can’t get enough funding to attend the college of their choice and others students who have welfare parents go for free. What is wrong with this system? Everything.
The government needs to increase the amount of funds for undergraduates. My classes are $1000 per class at a public university. Something needs to be done ASAP!