An ombudsman is someone appointed within the government or a private organization to investigate complaints against poor administration of programs. If you are having trouble with your student loan servicer, there are two student loan ombudsman groups that you should know about. Both exist to help federal student loan borrowers report and resolve complaints regarding servicing and origination of their federal student loans. One of the groups can also assist borrowers who are experiencing difficulty with their private student loan lenders.
What is the Federal Student Aid Ombudsman Group?
The Federal Student Aid Ombudsman Group is a part of the U.S. Department of Education. Its purpose is to resolve disputes relating to any of the loan programs originated by the federal government, such as the Direct Loan Program and the Federal Family Education Loan Program. As a neutral and confidential department, the Ombudsman provides an avenue for borrowers to submit complaints and get help to resolve them. There is an online process to submit complaints and requests for assistance, which requires the borrower to provide their name and social security number so the Ombudsman can look up their federal account information.
Borrowers who are not comfortable submitting their information through the online portal can also call the Ombudsman to submit a complaint or find options to have the Ombudsman assist them in resolving disputes with their federal servicer. The office advises borrowers to be prepared with information relevant to their dispute or complaint, such as the exact type of problem(s), whether they are currently late or in default on their payments, and whether they have made all of their payments on time. The Ombudsman can even assist borrowers when they believe their servicer has reported incorrect credit information to the credit bureaus. It is important to gather all documentation related to the loan prior to reaching out so the Ombudsman has all of the information necessary to help.
What is the CFPB Student Loan Ombudsman Group?
The CFPB Student Loan Ombudsman Group was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The purpose of the Ombudsman is to elicit statistics and information from student loan servicers to analyze complaints and highlight debt collection and servicing problems within the federal government’s various student loan programs as well as private loan programs. Their mission is to use the information collected and analyzed to help the Ombudsman identify ways to get defaulted student loan borrowers out of default and into appropriate repayment plans.
The Ombudsman releases an annual report that identifies the worst issues facing student loan borrowers, including red tape, breakdowns in communications between borrower and servicer, and lack of knowledge that income-driven repayment plans exist. The annual report also makes predictions for the future regarding trends in federal student loan borrowing and defaulting. Consumers with student loans can submit complaints to the Ombudsman regarding everything from communication gaps to inappropriate debt collection practices.