By Ella Azoulay | September 22, 2023
On September 14, the Student Borrower Protection Center hosted a day of action wherein student loan borrowers across the country were encouraged to call their student loan servicers and report out their experiences. Next month, the U.S. Department of Education (ED) is requiring 43 million borrowers to make payments on their federal student loans after three and a half years. Amid the restarting of tens of millions of borrowers payments, along with a new repayment plan, and millions of loan transfers, servicers are also cutting call center hours. In a time of great chaos and confusion, borrowers are expected to make do with a student loan system that has long been beyond repair.
The call-in effort documented that even before payments resume, student loan servicers are unable to meet the needs of borrowers. When tens of millions of borrowers see a bill and inevitably have questions, they will all attempt to contact a servicer and ED at once. Our test demonstrated just a mere fraction—a preview—of the demand and dysfunction to come in the next few weeks. Borrowers shared their frustration due to servicers’ broken promises:
- Xan from California said, “It took nearly 5 minutes and multiple menu selections to even get in the line to talk to a representative. Estimate wait time was 26 minutes. I selected the call back option. It has been nearly 2 hours and I have not received a call back.”
- Mercury from New Hampshire said, “I’ve been trying to get on the EdFinancial website for weeks, but trying to get to the ‘SAVE’ page only results in an error. Trying to log a complaint online also results in an error.(surprise!) I have called this week and have been given wait times like 259 minutes and 196 minutes. They say I can have my place in line saved and they will call me back, but they never do. I don’t know what to do! I’m stuck! I’m on Disability and have a $500+ student loan [payment] coming at me with no help in sight. Dumpster fire is right!!!”
Notably, we’ve already seen several massive servicing failures even before this action: the infamous MOHELA call wait-time debacle last year, and when Nelnet unexpectedly closed its call center during business hours earlier this year. According to ED’s own metrics for its contractors’ customer service, the loan servicers failed to meet requirements for call-wait times and call-abandon rates (when a borrower hangs up before speaking with a representative) in 2022 during the payment pause. Cory Turner of NPR reported seeing, “unpublished federal data showing multiple servicers have had call wait times so long that more than half of borrowers gave up before getting through on the phone.” Borrowers also shared stories demonstrating that these incidents weren’t isolated to our day of action:
- Tao from California just wanted to ask a question about the SAVE plan, “since there’s not a sufficient FAQ online,” and had this nightmare experience:
“I’ve called my loan provider at least 5 times in the last two weeks, each time it’s been at least 400 minute reported hold time. So I’ve selected the “call me back” option and have never received a call back. So yesterday I did my due diligence and got up at 5am my time (PST) when they open. By the time I got through the prompts, it was 5:04am, I was told by the automated voice that I had a 4 min wait time. 90 min later, I decided I needed to ask for a call back. An hour after that (total 2.5h wait), I ACTUALLY got a call back! I was ecstatic! No one answered though… I desperately made sure to keep talking, begging them not to hang up, asking them to check their headphones, etc… and after 2 min of silence/background noise they hung up. I almost started crying… I thought maybe, just maybe, they’d give a courtesy call back since there was no response, but of course not. I called right back, was informed of a 100 min wait time, asked for a call back because I had to go to work, and yet again no one called back.”
Servicers have been confusing and harming borrowers in a myriad of other other ways too, such as providing misinformation or losing payment histories. It’s incredibly distressing for borrowers who feel powerless to correct their servicer, even over something that should be simple like calculating a monthly payment:
- Kai from Oregon also called MOHELA before the day of action, on September 13. With two kids in pre-school and both them and their spouse steeped in student debt, they are seeking clarity but have gotten conflicting answers from MOHELA and ED:
“The loan simulator on StudentAid.gov told me my monthly payment would be $486. However, my account on MOHELA says my payment would be $970 (I’m on the SAVE plan in both scenarios). So I call in with the obvious question: What’s my loan payment going to be when payments resume in October? MOHELA could not answer this question.”
This all comes after ED’s Office of Federal Student Aid repeatedly warned servicers in writing (in private emails obtained by the Debt Collective) to expect increased call volumes over a year ago when ED first started sending out frequent email communications to borrowers about debt cancellation. This warning was delivered in the larger context of the then-impending debt cancellation, but logically servicers should have acted then to prepare and applied that logic generally as news about cancellation and other massive announcements from ED continued to break.
The results of the day of action proved what we already knew: the student loan system isn’t ready to return to repayment, despite years of forewarning and ample time to prepare.
Among the borrowers who wrote to us about their call-in experience, the average wait time was roughly 110 minutes. Many informed us they were unable to reach their servicer entirely. Others requested a call back that never came, were hung up on, or had to call back multiple times to get through. If borrowers can’t get answers from their servicers, every program ED is attempting to implement is destined to fail. And the result will be that borrowers are denied their rights.
Here’s what some other borrowers had to say about their experience:
- Alicia from New Jersey called Nelnet to ask about payments restarting. “My expected wait time began with 30 minutes, then an automated message said I can expedite my call with additional more information. I provided the information and I was told my call would be answered in 86 minutes…”
While on hold, an automated message gave some basic information about President Biden’s on-ramp that the borrower later realized conflicted with what the representative said upon answering.
“I’m hearing one thing from the government and a totally different thing from my loan servicer. The servicer will end up handing down the punishment so I’m worried [about taking] the Biden Administration at face value with the on-ramp. I did push a bit more on this issue and was told that next year or next summer Nelnet may have more information, even though by then it would be too late…”
- Aliyah from New Jersey was quoted a 45 minute hold time to speak with a MOHELA representative and said,
“What makes it infuriating is that I originally emailed questions, heard nothing, called in, waited on hold for ages, asked the questions, only to be told that there would be a 2 hour wait for them to speak with their supervisor. When I say that I don’t have the time (or cell battery) to wait that long, we disconnect, and then next time I email, they say ‘We see that you called in and assume that everything was addressed.’”
- Maria from Texas said, “I called in on my lunch break… [I got a] message [that] there will be a 30 minute wait. After entering my personal info and receiving [an] update on my account, I start waiting again [and] after about 2-3 minutes I got [a] message that it will be a[n] 85 minute wait time.. At this point I had to hang up because I had to return to work…”
- Percy, a Nelnet borrower from New Hampshire, was on hold for an hour and 40 minutes. They said,
“Although I had submitted a previous application that showed my monthly payment would be $125, Nelnet told me when I called that it would be $0 and was not going by my tax return for 2022 so this is confusing as I didn’t think you could do that. I am currently unemployed, I have a small monthly pension and my wife has SS and a small monthly pension. The process for all this is total BS and Biden should just cancel the debt.”
- Ali from Oregon struggled to get in touch with Edfinancial, “I tried using the online chat for help but it is a robot that is very unhelpful and when I am able to get past that to a live representative it tells me there is not one available (during their stated available hours) and then disconnects me. I then tried to call customer services and spent about five minutes just navigating their menu which asks for my SSN and then loops back to ask it again and will not let me bypass… I hung up and tried again and this time I got through all the prompts and was placed in [the] queue only to find an expected wait time of five and half hours (they say they will keep my place in line and call me back).”
Our call to action demonstrated that at a moment when servicers need to be stepping up, servicers are falling down. The borrowers who called their servicers never received the service they needed to navigate the return to repayment—the results are potentially financially disastrous for borrowers. Servicers must be held accountable for their actions and borrowers must be protected from their failures.
Note: The names of borrowers who wished to remain anonymous have been changed to protect their identities.
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Ella Azoulay is the Research & Policy Analyst at the Student Borrower Protection Center. She joined SBPC from the Center for American Progress where she worked on higher education policy and advocacy.