Student loan servicer problems and how to escalate

Most student loan servicer problems, such as misapplied payments, stalled repayment plan applications or missing PSLF payment counts, get fixed by documenting the problem, putting it in writing to the servicer, asking for a supervisor, and then escalating: to the Federal Student Aid Ombudsman at studentaid.gov for federal loans, or to a regulator for private loans. Start by confirming whether your loans are federal or private, because the rules and the escalation path are different.

Federal or private: check first

Your studentaid.gov account shows every federal loan and its current servicer. Any student loan on your credit report that is not listed there is probably private.

Common servicer errors

• Payment allocation. Extra payments applied to future months ("paid ahead") instead of reducing principal, or spread across all loans instead of the one with the highest interest rate.
• Autopay problems. Autopay stopped after a plan change or transfer, leading to missed payments or lost interest rate discounts.
• Income-driven repayment (IDR) processing. Applications or recertifications stuck for months, or payments calculated with the wrong income or family size.
• Forbearance mix-ups. Forbearance applied without your request, or a requested one never processed.
• PSLF counts. Qualifying payments for Public Service Loan Forgiveness missing, or employment certifications not credited.
• Credit reporting. Payments reported as late when you were in an approved plan, deferment or forbearance.

Fixing a payment allocation problem

You generally have the right to tell your servicer how to apply extra payments. Send written instructions, then check the next statement.

1. Say what you want. For example: apply any amount above my required payment to the principal of the loan with the highest interest rate, and do not advance my due date.
2. Ask that the instructions stay on file for all future payments.
3. Check the result in your payment history. If it was misapplied, ask for the payment to be reprocessed as of the date it was received.

When your loan is transferred to a new servicer

Federal loans are moved between servicers from time to time, and transfers are a common source of errors. You should get notice from both servicers, and studentaid.gov will show the new one.

• before the transfer, download or screenshot your payment history, balances and plan details
• confirm the new servicer through studentaid.gov, not a link in an email or text
• set up autopay again if it did not carry over
• check your balances, interest rates, repayment plan and payment amount after the move
• check that your IDR and PSLF progress carried over

Keep records of everything

Good records turn a "he said, she said" dispute into a quick fix.

• monthly statements and annual tax forms
• bank records showing every payment
• copies of every application, certification and letter you send, with dates
• confirmation numbers and screenshots from online submissions
• a call log: date, time, the representative's name or ID, and what you were told
• your PSLF employment certifications and qualifying payment counts

How to escalate a problem

1. Contact the servicer and document it. Explain the problem clearly and ask for a reference number.
2. Ask for a supervisor or the escalations team if the first answer does not fix it.
3. Put it in writing. Send a written complaint through the servicer's secure message center or by mail. Keep it short and include what you want done.
4. Federal loans: go to Federal Student Aid. Submit a complaint through the FSA Feedback Center at studentaid.gov. If that does not resolve it, contact the Federal Student Aid Ombudsman, a neutral office that helps resolve disputes.
5. Private loans: go to a regulator. File a complaint with the lender, then consider the Consumer Financial Protection Bureau (CFPB), your state attorney general, or your state's student loan ombudsman if it has one.

For more on escalating, see what to do if a company ignores your complaint.

Avoid student loan "relief" scams

Everything you can do with a federal loan, including changing plans and applying for forgiveness, is free through studentaid.gov and your servicer. Be wary of companies that charge upfront fees, promise quick forgiveness, or ask for your FSA ID. Never share your FSA ID or password. See how to spot financial scams.

Check your servicer's record

You can compare student loan companies' complaint records, or look up a servicer such as MOHELA, Nelnet, Navient or Sallie Mae to see how it tends to respond to complaints.

This guide is general information, not legal or financial advice. Federal student loan rules are changing, and some protections for private loans vary by state.

Questions and answers