Granite State Management and Resources is a nonprofit organization that services federal and private student loans. GSM&R is an agency in the New Hampshire Higher Education Assistance Foundation Network Organization.
GSMR shares their goal of helping students plan for, attend, and pay for college with the other agencies in the organization: the New Hampshire Higher Education Assistance Foundation (NHHEAF), which is the namesake of the organization, specializes in default prevention; and the New Hampshire Higher Education Loan Corporation (NHHELCO) provides private student loans through the EDvestinU student loan program, which are serviced by GSM&R.
The organization boasts community involvement, and even regularly awards scholarships to students. Any profits they make from their private student loans get put right back into the organization and the greater New Hampshire community, where they support higher education by offering borrower benefits and helping community members avoid default, plan for college, and achieve financial fitness.
GSM&R is one of the smaller federal student loan servicers, but it is not spotless. Websites like the Consumer Financial Protection Bureau (CFPB) and Better Business Bureau (BBB) have collected many complaints about GSM&R. Mostly, those complaints follow the national trends reported by the CFPB.
It’s not uncommon for student loan borrowers to complain about interactions they have with their servicers. Frequent topics of contention concern a lack of information about options, problems enrolling in income-driven repayment plans, and customer service issues. GSM&R is certainly not free from those problems, but we noticed a few other issues among their borrower complaints that are worthy of attention.
Borrowers often apply for deferment when they need a break from paying their student loans. The typical complaint about deferment is that servicers suggest deferment instead of longer-term solutions when borrowers cannot make their payments. GSM&R borrowers, on the other hand, complained about how long it took them to process a deferment application. Delays can lead to missed payments and a hit to a borrower’s credit score.
Some borrowers who were starting school applied for in-school deferment but found out that their deferment wasn’t going to last as long as they needed. GSM&R blamed changing information about how long the student would be enrolled, though the borrower had submitted the correct information from the beginning.
One couple’s account was transferred to GSM&R while their son was still in school. GSM&R removed the loans from in-school deferment before the student graduated and did not notify his parents until the loans were delinquent. When they called GSM&R, they were told that they can enroll in deferment at any time through their online account.
However, when they went to do that, they found no option for in-school deferment. Instead, the website claimed they needed to have an economic hardship to defer. They called in to customer service for an explanation, but the representative was not helpful, repeatedly stating “that’s the way it is” instead of trying to help them. They were forced to set up payments immediately to try to save their credit. Now, the online portal has an option for in-school deferment, but it was too late for these borrowers.
Most borrowers leave college with more than one student loan. Those loans often have different interest rates and different balances. One way to attack your student loans smartly is to target certain loans for quicker payoff.
When GSM&R borrowers try to do that, the payments often get split between the loans, even if they successfully targeted a single loan in the payment process. While some borrowers say a GSM&R representative initiated the incorrect payment, most complain about their misleading web account. The web portal will allow borrowers to make a payment on a single loan; however, if the loan has been consolidated, the system cannot apply a payment to part of the consolidated loan.
A borrower complained on BBB that his $2,100 payment, which he requested to be applied completely to pay off his smaller loan, was split between both his loans. He demanded that the payment be refunded to him because it did not have the effect he wanted, and he wanted to know why the online account was misleading.
In GSM&R’s response, he learned that they keep subsidized and unsubsidized loans separate within a consolidated loan to “track the amount that may be eligible for [his] interest subsidy under certain circumstances.” GSM&R refunded the $2,100 payment.
Another borrower who tried to target specific loans had little success and resorted to calling in every month to try to get those payments applied as requested. It’s unclear if they were successful, but after a few months, they noticed that their auto payments increased without their approval. They said the increase was very small, and that most people might not even notice it, but they worried that a change like that would be made solely for GSM&R profits.
Credit Reporting Complaints
Like all other types of credit, student loans can positively or negatively affect your credit score, depending on how the servicer reports your accounts to the three credit agencies. Sometimes, a creditor will inaccurately report someone’s account.
In a particularly bad case, GSM&R reported to TransUnion that about 90,000 borrowers, according to someone who submitted a complaint on BBB, had filed for bankruptcy and that they could not pay their student loans.
Borrowers began discovering the issue when their credit monitoring services notified them of a credit score drop of up to 100 points. These borrowers were often in good standing before the error. GSM&R did not reach out to any affected borrowers. It appears they hoped to fix the error without anyone noticing.
When borrowers called in about this error, representatives could do nothing to help them, but assured them it would be resolved in a few days and told them to continue to monitor their credit. However, the issue was not always resolved quickly and affected more than some borrowers’ credit scores.
In one case, this error prevented a borrower from purchasing property because his credit score dropped almost 100 points. GSM&R worked with TransUnion to fix the credit report, but the borrower requested to be compensated for his loss of purchasing power and time resulting from their mistake. It’s unclear if GSM&R granted his request.
Falsely reporting bankruptcy on someone’s account is bad enough when it’s just one person. But the way the company handles it says a lot. GSM&R’s response didn’t inspire confidence. The delay in fixing the error and refusal to proactively communicate with those affected shows irresponsibility. Therefore, it’s not much of a surprise to see them responding with the same impersonal copy-and-pasted message to the multitude of BBB complaints.
Other Miscellaneous Complaints
Of course, there are always other complaints that don’t fit into a category. While these might not appear as trends, they are worth mentioning, if only because the borrower experienced such a breakdown in communication that they resorted to a public website like CFPB and BBB to get these issues resolved.
Most servicers have at least one experience with customers who cry fraud. GSM&R is not immune from that. In this borrower’s case, they sent letters disputing the loans — those letters went unanswered. When the borrower did talk to GSM&R, he said they took no action.
Finally, in response to a BBB complaint, GSM&R outlined what the Department of Education needed to discharge the borrower’s loans and sent the department the information they had, even though they had not received all necessary information. The department approved the claim, notified the credit agencies, and sent the final approval notification to the borrower, though he then complained never received it.
There are a handful of student loan assistance programs for those who served in the military, and things tend to go wrong. For this borrower, the process went relatively smoothly until GSM&R reported delinquency to the credit agencies for a loan the borrower was told had been fully paid off.
A combination of a lost payment and miscommunication about who was responsible for paying the interest on the loans resulted in a balance after the Army had made all their required payments on behalf of the borrower. The borrower was willing to make more payments, but GSM&R stood by their decision to report the account to the credit bureau. It’s unclear what the final resolution was.
What To Do When You Have Problems With GSM&R
It’s impossible to predict whether you’ll have problems with your servicer, but knowing the kinds of things other people have problems with can influence how you go about similar interactions.
For example, if you want to make a payment to target a specific loan, first determine whether the loan is actually separate, like the website may show, or if it has been consolidated with another loan. If you’re not sure, it’s best to call customer service and ask for help. But make sure to check on your account after any interaction to make sure nothing went wrong.