Frustrations with my new student loan servicer

Since I only took out Stafford loans while I was in school, I was able to consolidate almost all my student loans into a single balance through a program called the Federal Family Education Loan Program (FFELP).

After I consolidated, I was able to use a website (which I believe was maintained by the federal government) to track my loan balance and otherwise access my account. Although the interface wasn't very slick, there was lots of information at my fingertips.

My favorite feature of this website was that you could see your specific amortization schedule for every single payment plan offered. This made it very easy to see the total amount of interest you'd pay on each plan.

For graduated plans, you could also see exactly when each increase in payment would occur and by how much your payment would increase. All this information made it much easier to decide which plan would be the best fit for you.

FFELP versus Direct Loans

However, in 2010, FFELP was discontinued and replaced with the Federal Direct loan plan. This was actually a provision of the Health Care and Education Reconciliation Act of 2010 (aka “Obamacare“).

In the FFELP days, private lenders were providing loans to students, though those loans were guaranteed by the federal government. These private lenders received a subsidy for originating the loans.

The Federal Direct loan program was implemented in order to end these subsidies by cutting out the “middle man” and having the U.S. Department of Education loan directly to students. The thought was this would save the government billions of dollars that could then be used to expand the availability of various types of financial aid (mostly Pell Grants).

Recently, the government began transferring the loans to private loan servicers once the federal government had originated/disbursed them. For a list of the current servicers of federal loans, click here.

Is it me, or did the Federal Direct program just reverse things? Under FFELP, loans were originated by a private lender, but if you consolidated then your loan was serviced by the federal government. Under the Federal Direct program, your loans are originated by the federal government, but serviced by a private company. Additionally, many of these are the exact same companies that used to originate loans under FFELP.

The New Interface

The move to private servicers has meant a new web interface. As far as I can tell, all private servicers use an identical interface, so everyone with Federal Direct loans is having the same user experience with their accounts.

Note: I discovered this because although I only have one servicer now for my Federal Direct loan balance, I have accounts at several of the servicers because I'm still in their systems from my loan-origination days under FFELP.

Personally, I am not a fan of the interface associated with Federal Direct loans. It's a lot prettier than the old FFELP interface, but gives a lot less information:

  • You cannot see an amortization schedule, although you can see the amounts that went to interest versus principal for payments that you have already made.
  • You cannot see what your monthly responsibility would be under each of the plans.
  • In the “My Payments” section, there are only two options: 1) request deferment/forbearance, and 2) “lower my payments,” which takes you to a tool that helps you enroll in the Income-Based Repayment plan (IBR).

What if I want to switch to a plan where I am paying more each month? Talking to a representative over the phone or by email, to me, is not nearly as useful as a chart that displays the amortization schedule for all of my options. It is clear from the “My Payments” section that as many people as possible are being pushed towards IBR, which is the highest-interest plan. Is that ethical?

My Monthly Payments

As the federal government farms out the servicing of accounts, they are capping the number of accounts each company services. In August, I received the following email:

As the number of Direct Loans continues to grow, Federal Student Aid has expanded their federal loan servicers to provide additional servicing capacity for the Title IV loans owned by the U.S. Department of Education. This will ensure an efficient and effective multi-servicer, borrower-centric approach to servicing. Please note that it may take up to 10 days before your new servicer has completely loaded your information to their system. Also, please be aware that if you are a borrower that was on the Direct Loan Servicing Center's Kwikpay auto debit program, that this information will be sent to your new servicer. You will shortly be receiving correspondence from your new servicer related to the transfer of your Direct Loan.

The first thing that happened was that my Kwikpay autodebit was not withdrawn on the normal date. However, I couldn't log in to see why, because I had not yet received correspondence from my new servicer with that information.

When I finally was able to log on, I discovered that my Kwikpay auto debit information had not, in fact, been migrated to my new account. I was able to enter all the information and have my August payment made within ten days of my due date.

However, the next month, my auto debit for September also did not go through. When I logged in to see why, my bank account information was all incorrect (not as in “one digit off” — as in “not even close”). How could this be possible when I had entered it only the month before and that payment went through just fine?

I took a deep breath, corrected the information, and made the September (now one-day late) payment on Saturday. The following Tuesday, I was notified that my September Kwikpay auto-debit had gone through. You know, in addition to the September payment I had made manually.

Um, what the heck?!?!

I transferred money from my savings account into my checking account to prevent an overdraft. Then I emailed my servicer to ask whether one of the payments could be applied towards the October payment since the September Kwikpay had been deducted FOUR DAYS AFTER my auto debit was authorized to go through AND after a manual payment had been made which I SPECIFICALLY FLAGGED as the September payment at the time.

As you can guess, crickets.

The system shows that payment as having been applied all to principal, which means it's being treated as an extra payment. Fortunately, due to an emergency fund as well as the fact that I'd paid off my consumer debt and hadn't allocated that toward another savings goal yet, I have the money.

On the one hand, it doesn't matter whether they apply it toward my October payment like I asked or whether my Kwikpay FINALLY goes through correctly next week (I'm waiting with bated breath, believe me). But on the other hand, the correspondence I have received saying they are dedicated to providing exceptional customer service is obviously a little inaccurate. Sigh.

What About You?

Any of you out there have Federal Direct loans? What's your experience been with the new servicers? How do you think it compares to the previous system?

More about...Debt

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Jon @ MoneySmartGuides
Jon @ MoneySmartGuides
7 years ago

Luckily I haven’t experienced the horror story that you have. My lender’s website is fairly easy to use but didn’t have the amort schedules that you mentioned. I just made it a point to pay off my loans as soon as possible so that I would limit the chances of screw up like you experienced.

csdx
csdx
7 years ago

That seems to be a feature of anywhere I try the in-house autopay system. If I log on 1-3 days after a payment is due, it’ll show as overdue, but at the same time I can check my bank account and see a pending withdrawal. Then after a few days, the money’s out of my account, and bill is marked as fine. I think it’s similar to how when I manually pay a bill, it states that payment is effective that day, but it takes a few days for the money transfer to actually go through. Seems to happen to… Read more »

EK
EK
7 years ago

Oh dear. It’s scary to have evidence of incompetence/negligence/lack of internal communication from companies who have access to your bank accounts and influence over your credit rating. I had a similar experience with an insurance company and wound up switching to another one. I had a 6 month payment autodebited after I canceled, which led to a very angry phone call and the best customer service experience I have EVER had from a lovely Indian woman – don’t knock foreign call centers! But then I was free of them, which is not an option in your case, it sounds like.… Read more »

Kerry @ Frugal City Girl
Kerry @ Frugal City Girl
7 years ago

The ‘new’ system was already in place for me when I actively started paying off my debt – so I don’t have much to compare it to. I agree that I miss the specific month-by-month amortisation payoff plans! But, I can do that myself with a loan payoff calculator – I like the simple one at What’s The Cost (link removed to avoid spam queue, but easily Googleable!). The thing where a payment disappears from the system for a few days while it’s being processed really confused and frustrated me too, until I figured it out. I still don’t know… Read more »

Honey Smith
Honey Smith
7 years ago

I’m assuming at this point that it’ll just be an extra payment I made (which at least all went toward principal) and am assuming they’ll withdraw the regular amount next week.

The thing about the amortization schedule that frustrates me is that since I’m on a graduated plan, I can’t tell how many months I have left at my current payment level, or what the payment will change to once I get bumped up to the next “round.” Surprise!

Audrey
Audrey
7 years ago
Reply to  Honey Smith

https://www.acs-education.com/CS/Jsp/general/home.jsp This is who currently has my loans, and I haven’t had any problems with them. They have a calculator for a couple of different repayment methods under info center. You might want to watch the “extra payment” though. A lot of times, the extra payment will screw up the autopay, and it will skip a month, and then the month after that you have double the interest to pay. It doesn’t count against you, but less of your payment goes towards prinicple (although you save the extra month that wasn’t charged to you). My site has a way to… Read more »

Kerry @ Frugal City Girl
Kerry @ Frugal City Girl
7 years ago
Reply to  Honey Smith

Oh man, not knowing the plan specifics sounds horrible. I obsessively recalculate my repayment plan twice a week (“what if I put in $5 more a month? would I be debt free three days earlier?”) so I totally empathize with the need to know exactly what’s going on.

LeRainDrop
LeRainDrop
7 years ago

Re whether paying extra early lets you skip the next payment: You need to talk to your servicer to put it on the setting you want. You can choose to have auto-deduct on no matter how much extra you have already paid, or you can choose to have it auto-deduct only if you haven’t already paid enough extra. Either way is in option, but you must tell your servicer if you want them to switch it for you.

Stephanie Click
Stephanie Click
7 years ago

My experience is so completely identical that I thought it was my personal story … Right down to the accidental second payment!!!

Jamie
Jamie
7 years ago

I was coming to the comment section to say the same thing! Luckily, I’m not too far off from paying everything off (after ten years of payments). I’m sorry that everyone’s going through the same thing, but I’m thrilled that it wasn’t just me 🙂

Michelle
Michelle
7 years ago

I’m glad we’re not the only ones who had this issue. I just left the second payment on the account, and congratulated myself for making the extra payment (even if it was by accident).

tas
tas
7 years ago

my bank lets me do an autopay through them rather than through the company which might be a good option for you. while you may get the 0.25% interest rate deduction for signing up through the lender, i’m not sure it’s worth risking your credit worthiness over that deduction. especially as i think you’ll pay the loan off early? if it continues, the new cfpb intervenes with lenders and might be worth pursuing.

Brandy
Brandy
7 years ago

ACS is literally the spawn of Satan. My husband and I are both on IBR and when it first came out we sent in our applications on July 1. Took them until Oct to process it. Recently he had to redo his paperwork. Had to send it in three times…. And we FAXED it! Claim after claim of non-receipt. They won’t do anything to correct their mistakes. I personally don’t see why you would switch to a higher payment schedule (say if you want to move from extended to standard). Just send in bigger payments. Also they sent him incorrect… Read more »

Alyssa N.
Alyssa N.
7 years ago
Reply to  Brandy

I had almost the same experience with ACS. I filled out all the IBR paperwork when I applied for my Direct Loan Consolidation and ACS claimed that they received none of it! I had to resubmit the paperwork twice!

You really have to take initiative and be on top of this stuff in order to catch these kinds of screw-ups that the loan servicers make. It’s so difficult to complete even the simplest of tasks that it’s no wonder so many graduates are defaulting on their loans.

Shari
Shari
7 years ago
Reply to  Brandy

I, too, hate ACS. They have no customer service. I have done my business with them through e-mail (they basically tell you not to call unless you want to be on hold for hours) and have been very frustrated by the responses from “customer service” people who have obviously not even read what I wrote. They also will not allow me to make extra payments to principal only. If I send extra above the standard payment, they distribute it how they see fit and I have no control. I’d like to pay mine off early but I’m not sure they… Read more »

LeRainDrop
LeRainDrop
7 years ago
Reply to  Shari

That’s weird. I finished paying off my last loan with ACS a few months ago. I always made my payments online and always had the option to pay down principal. You just select how much you want to pay, and then it goes through. However, you MUST pay off all current interest first. For example, if your minimum is $110 to cover $100 of principal and $10 to interest, then when you pay $150, the first $10 goes to interest and then the next $140 goes to principal. If you decide five days after making a payment that you want… Read more »

Ghost
Ghost
7 years ago
Reply to  LeRainDrop

I also just finished paying off my loans through ACS. I never had to designate where my payments went – any accrued interest since my last payment was first paid and the rest went to principal. I had absolutely no problems. I signed up for the auto-withdrawal but made manual online payments twice a month so I never had to deal with the auto-withdrawal. But I’m super crazy so I needed the control aspect of manually making the payments and I also obsessively checked my account after making a payment until I saw it go through. Loved seeing the balance… Read more »

Honey Smith
Honey Smith
7 years ago
Reply to  Brandy

Now that I see that they apply “extra” payments to principal, I don’t plan to try to go through what I imagine would be an incredible hassle to switch plans. I think your idea of just making extra payments is the way to go.

shannon
shannon
7 years ago
Reply to  Brandy

100% agree with you on ACS. My husband and I both have our loans through them now (just regular, straight up student loans), and they “lost” a payment one month on his loan. The automatic withdrawal left our checking account as usual, but never posted to the account at ACS (and since their user interface is soooo “user friendly”, up till that point, I had just watched our checking account to make sure the withdrawal came out in time and considered it paid…not so anymore; now we watch it like a hawk). So then two weeks after the automatic withdrawal,… Read more »

Elizabeth
Elizabeth
7 years ago

I didn’t have any problems with my student loan (when I had one), but this post really drives home the point that when you’re in debt, the party managing your debt has more control than you do.

Helene
Helene
7 years ago

I had the same experience with Mohela. They are HORRIBLE!!! They couldn’t get the payments right for a couple of months. I wish the old site would come back!

Heather
Heather
7 years ago
Reply to  Helene

I’ve had the exact same problem, and trying to contact them is futile. According to their website, I’m signed up for Automatic Withdrawal, but I cannot figure out how to change either the date or amount of the withdrawal.

Tom
Tom
7 years ago
Reply to  Helene

ditto. The old dl.ed website withdrew money on the correct date and reflected the payment the day it was paid. My former car loans and my current mortgage work that way too. This website is stuck in the stone ages, for some reason. The new website didn’t even work when they first switched! I couldn’t log in due to overloaded servers, and was afraid they were going to charge me late fees, etc. My auto debit account information also was wrong. One digit was out of place, and prior to reading this article, I assumed it was a typo on… Read more »

Jenn
Jenn
7 years ago
Reply to  Tom

I also have my student loans with Mohlena, I am on the IBR plan, I was young and didn’t realize what I was getting myself into with this student loan debt : (, and when I got married last year they wanted me to pay $780 dollars a month! For 20 years! I told her I cannot make that payment, there is no way, so any way after several phone calls later I reached this lady and she told me to file my taxes seperately from my husband each year and we will not pay anything because of our household… Read more »

Derek
Derek
6 years ago
Reply to  Jenn

Jenn,
I don’t know if I would listen to the servicer about whether or not to file separately. Some cases, like mine, where my wife also has student loans, turn out better if we file jointly. Also, unfortunately, only payments made after entering the IBR plan count towards the 25 years. It’s 25 years for loans made before July 2014.

cc
cc
7 years ago

I hate student loan providers!! And paying extra doesn’t always work smoothly either. I’ve been paying extra on my smallest student loan (all are gov’t sub and unsub) and they keep putting a “paid ahead” status on that laon. This status allows my regular monthly payments ($20.35) for that loan to be redirected to my other loans except they don’t put the entire $20 towards 1 loan they break it up and apply it to 6 different small loans. I have called twice a month for the last 4 months and every person assures me its been taken care of.… Read more »

dave
dave
6 years ago
Reply to  cc

This is happening to me too. Basically, they are preventing us from targeting high interest rate loans and are simply redistributing the extra payments over all loans, thus increasing the total amount I will owe.

mkwChi
mkwChi
6 years ago
Reply to  cc

It sucks you’re having a bad experience, and I’m sure you spoke with somebody and explicitly requested any excess payment be made against the current principal balance rather than future payments.

I just want to chime in and point out that interest on student loans is tax deductible; hence, any “overpayment” applied to the principal rather than interest will increase your adjusted gross income. That’s almost trivial though, if you’re not on an “income-driven” repayment plan.

Tonei
Tonei
7 years ago

I noticed this alert at the top of my account when I logged in today — not sure if it’s related to your situation: “Message to borrowers enrolled in Kwikpay (Electronic Debit) Under Kwikpay, the Direct Loan Servicing Center will now debit your bank account on the first business day after your due date. The Direct Loan Servicing Center will apply the payment to your Direct Loan account with an effective date that is the same as your payment due date. If you access your account via this Web site before both the bank account debit and the Direct Loan… Read more »

Honey Smith
Honey Smith
7 years ago
Reply to  Tonei

Sounds possible. Though it doesn’t get rid of my frustration!

Lincoln
Lincoln
7 years ago
Reply to  Honey Smith

I know we live in the Internet age, but most of Honey’s questions and frustrations could have been resolved by picking up the telephone and talking to the new loan servicer before making any new payments. It’s no fun to have to deal with administrative changes, but you are the one with the debt, so it’s on you to stay a few steps ahead of it. Don’t like it? Then pay off the loans before it gets transferred yet again. My student loans have been transferred four different times. Each time it happens, I just try to use it as… Read more »

Rya @ bulgarian money blog
Rya @ bulgarian money blog
7 years ago

Well, when I went to college, student loans were pretty much unheard of in Bulgaria. (That became part of the reason why so many students went to work in the USA for the summer through WAT programs – they needed some way to pay for college.) Now student loans are more common, but I don’t think they are regulated very well – they’re pretty much left at the mercy of the banks and are much like the regular consumer credits. If there’s one thing I want my future kids to know about bank, it’s that THE BANKS ARE NOT YOUR… Read more »

Tom
Tom
7 years ago

Hi Rya,
Does it go away when you refresh the page? That seems to work for me.

Rya
Rya
7 years ago
Reply to  Tom

Bummer! It does work.

(I feel so silly now.)

Thanks, Tom!

tekym
tekym
7 years ago

I, too, wish the old site would come back. They switched me first to Nelnet, and now I’m with MOHELA. Nelnet was awful. Errors galore, their website was confusing and nearly useless in terms of finding the information I was looking for, and I sent several rather vitriolic emails about the problems I was having and never received a response. MOHELA has been comparatively wonderful, although as you say their site is much less useful and less informative than the old Dept. of Education-run site was.

Katie
Katie
7 years ago

I’m having a lot of trouble reading this article, there’s a strange half-transparent ad blocking a large portion of text. Please fix!

Rya
Rya
7 years ago
Reply to  Katie

I know, I told them yesterday in the comments. I don’t see a CLOSE button for the ad, either.

Amanda
Amanda
7 years ago
Reply to  Katie

JD made his money off this site. Now he’s gone.

Nobody is responding to the complaints about how the site is now unreadable. Either someone doesn’t care, or this is someone’s passive-aggressive way of getting us off the site.

Either way–they win. Someone doesn’t want to take care of the readers, why should we keep giving that person page view$?

Kris
Kris
7 years ago
Reply to  Katie

There is no ad blocking text on my screen. It could be something unique to your browser or operating system, and makes it harder to troubleshoot.

Jen
Jen
7 years ago
Reply to  Katie

Readers,

We have run into a couple of issues while doing some site maintenance. We are working to ensure that the page view returns to normal. Thanks for your patience and understanding during our transition. We are fully committed to GRS, though you may not see it in the comment section. 🙂

Thanks,
Editorial Elf Jen

imelda
imelda
7 years ago
Reply to  Jen

It matters a lot to see it in the comments section.

You could find a different way of responding to feedback, but you’ve got to find a way. I don’t think readers will take well to being ignored!

Edward
Edward
6 years ago
Reply to  Katie

Oh yeah. That’s just because they’re monitoring you. They like to follow you around online so they can hold your hand and lead you into more predatory loans.

Kate
Kate
7 years ago

I’ve been happy enough with the part where PHEAA/FedLoan Servicing takes my money BUT they are way behind on answering correspondence! I sent a form in May to certify the number of qualifying payments I’ve made under the Public Service Loan Forgiveness program, and they *still* (in October) are “reviewing” my file. Sigh.

A-L
A-L
7 years ago
Reply to  Kate

I’m with you on the Fed Loan correspondence. I never had any student loans but I started a grad program, and because I’ve been a teacher in a high-needs area I was eligible for $5000 in loan forgiveness (and it had to be a loan…they wouldn’t just pay the tuition as it came due). So I took out $5k in loans, and it’s been the biggest nightmare to get the loan forgiven. Documents having to be sent back and forth repeatedly over errors on their part (like when they calculated time from January 2007-June 2008 as 6 months instead of… Read more »

A-L
A-L
7 years ago
Reply to  A-L

A happy update. Inspired by this post, I decided to contact Fedloan again and see what was up with my loan forgiveness. 2 days later…my $5k was applied to the loan, and I paid off the accrued interest this morning. YIPPEE!

Honey Smith
Honey Smith
7 years ago
Reply to  A-L

That’s amazing! Talk about TGIF 🙂

Paris
Paris
7 years ago

I consolidated my loans into a Direct Loan because my lender (IDAPP) was screwing up my payments (not allocating my monthly payment to each loan and then sending me non-payment letters). My experience with the Feds was completely fine, but last year I was transferred to Mohela, who are just as incompetent as IDAPP. The website lists options for making a payment and such, but in reality, I have to call them to do anything. I am shifting the bank account from which my direct debit comes and I dread how much trouble they are going to have with this… Read more »

Shawn G
Shawn G
7 years ago

We had a similar experience, but it was a little worse. My wife had made our last payment to Federal Direct, so her loan was payed off. We then received a notice stating that Federal Direct no longer was carrying her loan. Then an amount was auto debited from our account (even though we had already payed off the loan). Long story short, it took us over 2 months to get this corrected and to get our money back and they refused to pay us a fee or interest, even though they certainly would have charged us. I’m glad to… Read more »

babysteps
babysteps
7 years ago
Reply to  Shawn G

The same thing happened to me when I paid off my student loan…17 years ago! The more things change, eh?

Jen from Boston
Jen from Boston
7 years ago

Wow – what a nightmare!!!! And it sounds similar to some mortgage servicer horror stories I’ve heard. It’s too bad we can’t pick our loan servicers – that’d give them some incentive to get their acts together!

Sarah
Sarah
7 years ago

I could have written this post. My auto debit stopped working (after 4 months), without any changes on my end. Ugh. And of course by the time I was notified, I was considered “late”. I spent one hour on the phone to ensure that I wouldn’t be charged a late fee. Maybe I’m paranoid, but I felt like this occured so that I wouldn’t get the interest rate reduction incentive for 6 months of on-time payments. A similar thing happened with Sallie Mae, although not at the same time. I called BoA to ensure that the problem wasn’t on their… Read more »

Michael
Michael
7 years ago

A year or two ago I received notice that my student loan was being moved from one servicer to Sallie Mae. I had consolidated a number of years prior to that and my interest rate was something like 2.7%. When my loan moved to Sallie Mae the interest rate jumped to about 5%. I just about flipped out as I don’t see any way that can be done legally. It’s like having your mortgage sold and it goes up 3%. It’s supposed to be a contract regardless of who is servicing the loan. Anyway, I tried and tried and tried… Read more »

csdx
csdx
7 years ago
Reply to  Michael

Were these the old style variable interest rate loans, or the new fixed interest ones?

If it was a newer one, I know that there was a subsidy by the government to cut the interest rates on student loans, but that was alowed to expire earlier this year (rates went from a base of 3.4% to 6.8%).

george
george
7 years ago

Any tips on lowering the rate for a private school loan? My gf is at 8.5% and has very good credit. Is 8.5% really the best she can do?

Sorry if this is off topic but her federal rate is much lower and the amount is smaller. She calls the private one the “evil” loan. I thought the decision to go to grad school for a poorly paid field was the biggest issue but what’s done is done. Thanks!

Honey Smith
Honey Smith
7 years ago
Reply to  george

I don’t have any private loans but am pretty sure it’s standard for the interest rates to be much higher. Ugh.

Jam
Jam
7 years ago

I have had nothing but issues since my loans we transferred from the Direct Loans to the outside servicers they are now using. You used to be able to do pretty much anything online, change your payment plan, apply for a forbearance, check out your different payment options. I am on my second servicer as I am eligible for the PLSF. First one, Aspire, never processed my payment plan change. I have now been switched to FedLoan (PA Higher Education Authority)so we will see how things go. And don’t get me started about how there was no notice that they… Read more »

Denise D.
Denise D.
7 years ago

I also have Federal Direct Loans and have switched over to a new site/loan servicer. I’ve actually been happier with the new site so far, although it takes a couple days to show that my auto-payment has been applied to my account. I haven’t consolidated, and I’m able to log onto the site once or twice a month and make extra payments toward my smallest loan. I’m also on the standard repayment plan, so I haven’t looked into IBR. My understanding is that the government is trying to educate more people about income-based repayment, so maybe there’s more focus on… Read more »

Jackie @ Simplification
Jackie @ Simplification
7 years ago

YES. THIS. I never had a problem with my loan servicing at the former Direct Loans Servicing website. I have set up my “KwikPay” options three times now at my new servicer. The website said everything was good to go – payment wasn’t deducted. Ever. Spent 30 minutes on the phone with them and they told me that next month, things should go through without a problem. (Also that late payments don’t matter… what?) 4 days after my payment was due – no payment deducted. Paid manually and had the same problem the next month. Right now my account says… Read more »

Samantha
Samantha
7 years ago

This makes me so glad to be debt-free. Even though “mathematically it doesn’t make sense” to pay off a relatively low-interest rate loan, the hassle and stress of dealing with it are not worth it.

You truly are a slave to your lender.

lolo
lolo
7 years ago

I’ve actually been pretty satisfied with the Direct Loans program. I agree that I wish there was more information. The FFELP site sounds awesome! I read that one of the problems with DOEd taking over the loans is the high rate of defaults. Before when individual servicers defaulted it was the bank that took the hit (minus the subsidy). But now the government takes a hit for all defaults and this reduces the pot of money that DOEd has to provide the loans in the first place. Perhaps the decision to transfer loans to private lenders was a way to… Read more »

wenhaver
wenhaver
7 years ago

My loan was in default, and I rehabbed it through ACS (who, like others said, are the devil). My rehabilitation was finished back in June, and they sold my loan to a new servicer. My new servicer’s website is so SLOW that I’ve had to log out and log back in because trying to load my account information makes the site time out. It can take up to 4 days for a payment to clear, and all the while I get threatening emails about my payment being late and how they have an absolute right to garnish my wages. My… Read more »

Meghan
Meghan
7 years ago

Once my consolidation went through, my experience with the Direct Servicing Center has been good. I’m on IBR and manually do each payment as my employer makes a donation to the cause annually and I don’t want to make a double payment for those months. The payment is larger than what’s due and the website advances my due date (I’m on the Public Service Forgiveness track so there’s no incentive to making duplicate payments). My interest rate is the average of the loans before consolidation, which is high at 6.75%. The only thing I wish they would bring back is… Read more »

William
William
7 years ago

very recently, the Department decided to move my loans from two servicers to one. They did this two days before my employer send two grand to the loan servicer to whom i no longer owe any money. That two grand has disapeared so far. Additionally, these two loans are at *very* different interest rates, and I pay much more than the minimum. They have no automated way for me to put extra payments towards the higher interest rate loan — so I am stuck, once a month, logging in and paying it online. I’m not going to give them access… Read more »

BC
BC
7 years ago

Just got switched from Nelnet to MOHELA. They’re my husband’s old deferred loans which I pay with a check so we haven’t had any hiccups with the transition. I’ve been paying off our debt in the order that the bills aggravate me and now after clearing our CCs, I have had my eye on focusing on these. It’s old, dusty debt that bugs me and I want them gone. All these stories are fueling the fire to take them out asap.

Jenne
Jenne
7 years ago

Sallie Mae and their associated services has always been lousy at servicing loans– I had similar problems 20 years ago. The best was when they CASHED MY CHECK for the wrong amount– i.e., NOT the amount that was written on the check– and then dunning me for underpayment. *shakes head* But the real difference between student loan services and others is that it’s so hard to transfer to another company so at least it’s not the same financial services company messing up– if I had stayed with the same large bank for 10 years, I would have experienced about the… Read more »

BD
BD
7 years ago
Reply to  Jenne

Wow, now I’m worried. I have my college loan through Sallie Mae, and so far, all my payments and servicing has been flawless. I haven’t had any trouble at all, and I just have another $1,000 left to pay off. I hope I can make it all the way through with no problems.

I’m sorry that you had bad luck through their site. 🙁

Lauren {Adventures in Flip Flops}
Lauren {Adventures in Flip Flops}
7 years ago

I, personally, have no complaints with Nelnet or ACS. The latter processed my IBR application quickly and I have no issues. The former does a wonky thing when I pay over my balance and “advances the due date” but I just ignore that and continue to pay each month.

Matt at Healthy N' Wealthy
Matt at Healthy N' Wealthy
7 years ago

Subsidize home lenders and guarantee home mortgages, and you get a housing bubble. Subsidize student loan lenders and guarantee student loans, you get a ___________ bubble.

The government should step out and let the private market decide how much a college education should cost. Though people have their hearts in the right place when advocating government involvement, it jacks up tuitions, and incentivizes naive students and parents to “invest” in an education that isn’t financially worth it.

This experience sounds extremely frustrating. Don’t expect the process to get any better with a monopoly running the system.

Eileen
Eileen
7 years ago

If you want your overage to go to your principal, you might want to double check with them to confirm where it’s going. Prepaying and paying add’l principle are two different things.

edit: oops this was in response to #35

Rebekah
Rebekah
7 years ago

My husband’s loan was transferred a few months ago, and we hate the new servicer. We actually wanted to make an extra payment and couldn’t get the website to work. It showed I had scheduled the payment but never took the money out of our account. What kind of business won’t take your money?

Carol
Carol
7 years ago

Interesting! My loan is also being serviced by a new company, but I haven’t logged into the new site yet to check it out. So far my debit payments have transferred smoothly and have continued as scheduled. Your story did remind me of what happened to me earlier this year when I tried to make an extra principal payment. They applied it to the following month’s payment instead of to the principal. When I called, they gave me some very confusing instructions as to how to avoid this and they said it was too late to apply it to the… Read more »

PB
PB
7 years ago

We are paying some of our children’s student loans. (Just one at the moment.) Since I am something of a troglodite when it comes to electronic banking, I just write ACS a check every month. In the interest of simplifying arithmatic, I just round the payment up to $300. It may interest you to know that they managed to mess up the payment schedule for check writers, too, and we actually wound up skipping a month (which was ok due to a bunch of medical bills that hit then.) However, even though I pay the same amount every month, what… Read more »

Deb
Deb
7 years ago

I used to have loans through the Federal Government and whenever I needed answers I could leave a message and they’d get back to me – in a week or two or more. Frustration – especially when you wanted answers now. Then I actually worked for a student loan company (for 5 years) that offered their clients excellent service and it was rare for a student to call and get even put on hold. The company’s premise was if you offer excellent service and be helpful, you’ll get more business by word of mouth. Colleges loved this lender. They were… Read more »

Marie at FamilyMoneyValues
Marie at FamilyMoneyValues
7 years ago

I hate not being in control – especially when I’m involuntarily switched to another service or product!

Hopefully you got the kinks worked out and won’t have to listen to ‘crickets’ anymore.

Ken
Ken
7 years ago

I know it is fun to complain about student loan service providers, but PLEASE PLEASE PLEASE take a few minutes to file a complaint with the CFPB (Consumer Financial Protection Bureau) – if change is going to happen, it will likely come from here! Most of you could just copy and paste what you have already written here!

http://www.consumerfinance.gov/complaint/

-Ken

Curtis
Curtis
7 years ago

I paid off my student loan balance about 5 days before the scheduled draft date. They drafted my payment anyway. My servicer can’t help, the direct loan people can’t help, I’ve just got to sit and wait, hoping they return my $250 soon.

babysteps
babysteps
7 years ago
Reply to  Curtis

If things really haven’t changed in the last 17 years (when I paid off my student loan “early”), if you sit and wait not only will nothing happen, they will keep taking money out of your account.

If you haven’t already, make sure to cancel the autodeduct with the servicer.

Then start writing/calling/smoke-signalling the lender to get your overpayment back.

You will get your money back but it may be a hassle…

steve
steve
7 years ago

My wife’s loans were transferred to ACS, and 7 accounts somehow became 4. Now, you might think that accounts with similar rates were simply combined from 7 to 4, but inexplicably at least one of the original 7 was split into 2 of the 4 new accounts. It took far, far too long to figure that out, just trying to make sure the amounts made sense and that we hadn’t gotten screwed by the transfer. I also echo the complaints that there is no easy way for principal reduction payments to be preferentially targeted at higher-rate loans. They will not… Read more »

LeRainDrop
LeRainDrop
7 years ago
Reply to  steve

Actually, as of a few months ago when I paid off the last of my ACS loans, on the payment page I had to specifically check the box(es) next to the loan(s) I wanted my payments to go towards and also write the specific amount I wanted to go to each specific loan. That way, I always paid my snowball to the highest interest loan. It was very easy. I hope this didn’t change!

Jenna, Community Manager at Adaptu
Jenna, Community Manager at Adaptu
7 years ago

Have you tried ReadyForZero? Would love to hear your thoughts?

Diana
Diana
7 years ago

ACS was processing my Perkins loan, and they were bad to deal with. But then the Dept. of Education took my loan. ACS would no longer accept payments and the Dept. of Ed couldn’t find me. For over six months I tried calling to find out who to send my payments to. I was either told they couldn’t find me in the system or their computers were down, mostly that their computers were down. After six months, I finally send them a letter asking them to please contact me about my loan. They did, to inform me that they had… Read more »

Dom
Dom
7 years ago

I’ve been using kwikpay on the old site for about a year with no problems..just got switched to edfinancial and I too noticed my kwikpay pay info was missing so I just input it an made sure that it was set up again. I watched my account like a hawk so if things go awry I can usually take care of it quickly.

Tina Denman
Tina Denman
7 years ago

I, too, had the same issues. I also used Kwikpay and the payments were not deducted. I wasn’t paying attention until I got a phone call from them saying I was 3 months behind! There is also apparently no way to complain about this. Another thing to watch – my interest rate mysteriously went from 6% to 9% and they don’t seem to know why. Another example of the Obama Administration stickin’ it to us. I can’t believe these “loan servicers” are allowed to get away with this.

Steph
Steph
7 years ago

Direct loan switched mine to Mohela a year ago and I still have not received a bill. They have been a nightmare. Luckily I have made a ton of extra payments and only have $200 left to payoff. But really, charge me interest for 12 months while making it impossible for me to make a payment? Ridiculous.

SLCCOM
SLCCOM
7 years ago

Just because you are paranoid it doesn’t mean they aren’t out to get you. Sounds like a very precise analysis to me!

Ashley
Ashley
7 years ago

We have the exact same problems!!! I wish someone would look into this. I feel like I’m defrauded monthly. They “lose” payments, change numbers, etc.

My husband’s work pays on his student loans (not much, but it helps cover the interest) and my husband is also back in grad school. EVERY MONTH we fight them not to put his loans (he has 8 different loans) in deferment. Every time they get put into deferment, his work doesn’t pay that month. We end up losing lots of money each year because of this! Errrr student loans!

maria
maria
7 years ago

I did not take student loans nor did we have to take out student loans for our children’s education – thankfully.
However, after reading all these comments – about midway through I thought to myself – I sure hope Obamacare is not this f#@$ed up.
With a husband that has stage 4 met. melanoma I fear that obamacare is going to be a worse stress than my husbands cancer. Fingers crossed.

Becky
Becky
7 years ago

Maria, The Patient Protection and Affordable Care Act (“Obamacare”) puts most people who earn more than 133% of the Federal Poverty Level (~$20,000/year for a family of two) into private insurance plans, with a federal subsidy if your income is below 400% of the FPL. This means that you’ll be a customer of a private insurance company. And frankly, private insurance companies screw people over all the damn time – but that’s not the fault of the new law. If anything, some provisions of the new law will help insure that your health insurer can’t screw you over quite so… Read more »

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