Too many borrowers experience these issues and don't know where to turn for help.
They spend months arguing back and forth with their servicers, getting nowhere.
Their credit scores tank. They face wage garnishment and more.
But here's the good news. Help is available.
Borrowers can save thousands of dollars on their loans by simply knowing when to seek professional assistance.
In this article:
- Why Student Loan Disputes Are On The Rise
- Common Student Loan Problems That Require Professional Help
- Signs You Need Professional Legal Assistance
- How To Find The Right Help For Your Situation
Let's take a closer look.
Why Student Loan Disputes Are On The Rise
Millions of borrowers are being misled by student loan servicers every year.
The Consumer Financial Protection Bureau received over 18,000 student loan complaints during the 2023-2024 period.
That's the largest number of complaints about student loans since they began tracking this data in 2012.
And unfortunately, it doesn't look like it's going to get any better anytime soon.
Borrowers who experience unfair termination, servicer errors, or other misconduct feel like they have nowhere to turn for help.
And a lot of them simply don't know that options like unfair termination legal help even exist.
Companies like Punchwork Law Offices specialize in helping consumers fight back against predatory practices and wrongful termination.
But here's the real story:
According to the Federal Reserve's 2024 report, 20% of student loan borrowers said they were either delinquent on their payments or in collections.
That's up from 16% just one year ago.
Four out of five borrowers are now struggling to some degree with their student loans.
While there are many reasons why borrowers have struggled since repayments began in 2023, many experts believe the following are to blame:
- When the COVID pause ended, 28 million borrowers suddenly started repaying their loans again
- Loan servicers have continued to make countless errors related to billing, payments, and account management
- Many borrowers don't understand income-driven repayment plans
- Some borrowers were misinformed about loan forgiveness and whether they qualified
Student loan debt isn't going away anytime soon.
As a result, millions of borrowers will continue to run into disputes with their lenders.
Common Student Loan Problems That Require Professional Help
Most student loan issues can be handled by borrowers themselves.
But if you've been encountering one (or more) of the following problems, it may be time to reach out for professional help.
Billing Errors And Payment Misapplication
This issue comes up more than you might think.
Borrowers have complained about making a payment and having it disappear.
Auto pay deductions that take the wrong amount of money.
Account statements that show the wrong balance.
While some of these problems can be easily fixed by borrowers themselves, others can cost you thousands over the lifetime of your loan.
IDR Dispute Resolution
Income-driven repayment plans have been a nightmare for borrowers.
Applications get lost. Students wait months to have their payments processed.
And IDR payments are often calculated incorrectly.
According to the CFPB, borrowers wait an average of eight months to get misapplication errors corrected by their servicers.
That's eight months of unnecessary payments and headaches.
Wrongful Default Collections
In some cases, borrowers have been asked to pay for loans that they didn't legally owe.
This can happen for a number of reasons.
Perhaps the loan was already discharged due to bankruptcy.
Maybe your loan account has incorrect balance information.
Or you might be getting chased by collectors for someone else's debt.
Any of these scenarios require you to seek legal help.
The consequences of a wrongful default can stay on your credit report for years.
They can make it impossible to get things like a mortgage.
And lead to wage garnishment and tax refund seizure.
Denial Of Loan Forgiveness Programs
Loan forgiveness exists for a reason. But not everyone who is approved for these programs actually gets them.
Borrowers are denied access to everything from Public Service Loan Forgiveness to:
- Borrower defense to repayment
- Closed school discharges
- Total and permanent disability
- Teacher loan forgiveness
Programs like Public Service Loan Forgiveness have extremely strict qualifications.
But borrowers are often denied even when they should've been approved.
Needless to say, fighting these denials yourself is near impossible.
Signs You Need Professional Legal Assistance
Don't wait until it's too late.
If you're experiencing any of the following, consider reaching out for professional help.
You've Been Going In Circles For Months
You've called your servicer several times. Submitted complaints. Sent letters via certified mail. And gotten nowhere.
This is often called "the doom loop" by the CFPB.
Your calls get routed to different departments who either hang up on you or tell you to send your request via mail.
If it takes more than 60 days to resolve an issue, it's time to seek outside help.
Your Financial Situation Is Deteriorating
When your ability to obtain mortgage, keep your current job, or your credit score is on the line… you need to speak with someone.
Attorneys can often get results quicker than borrowers who are on their own.
You're Being Taken To Court
Loan collection lawsuits. Wage garnishment notices. Default letters.
These all require you to take immediate action.
While you have certain protections under the law, you'll need to know how to invoke them.
Your Rights Have Been Violated
Student loan servicers break the law on a regular basis.
They lie to borrowers about their rights.
They knowingly deny qualified borrowers access to certain benefits.
They use illegal collection tactics to intimidate borrowers into paying.
If any of the above applies to you, chances are you need legal help.
How To Find The Right Help For Your Situation
You can approach your particular situation a few different ways.
First, here are your best bets:
Consumer Protection Lawyers
These lawyers specialize in predatory practices. They know student loan rules inside and out.
More importantly, they know consumer law.
Many consumer protection lawyers offer free consultations to review your case.
You can try reaching out to your local bar association or look for reviews online.
Non-Profit Credit Counselling
The National Foundation for Credit Counseling is a good place to start.
You'll want to avoid any organization that tries to "help you" with your student loans for a price.
While some of these companies are legitimate, others try to prey on vulnerable borrowers.
Government Resources
You can also file a complaint with the CFPB. They'll look into your situation and may be able to assist you.
Keep in mind that some state attorney general offices have departments that focus exclusively on student loan misconduct.
Beware Of Anything Promising Quick Fixes
Here's a quick warning…
There are tons of scammers out there targeting student loan borrowers.
DON'T pay anyone upfront fees to "fix" your loans.
Don't trust "companies" that guarantee results in a vague manner.
While everyone wants their student loan problems fixed as soon as possible, there are no guaranteed quick fixes.
Wrapping Things Up
Student loan disputes are far too common these days.
But just because these problems are widespread doesn't mean you shouldn't fight back.
Remember:
If you haven't been able to resolve your situation after 60 days,
If your credit score is being impacted,
You're being taken to court…
…it's time to call for backup.
Don't let student loan servicers run you around in circles any longer.
You have options.
Fight for yours.
