CornerStone Student Loan Servicing Problems

ACS Transfer Mishaps

ACS is a student loan servicer that lost their credibility several years ago. After the Department of Education decided to transfer all Direct Loans serviced by ACS to other servicers, many went to CornerStone. Unfortunately, too many of those transferred accounts arrived incomplete, resulting in borrowers discovering that their income-driven repayment plans, deferment status, auto-payments, or even interest rates did not make it through the transfer.

When your loans transfer to another servicer, the only thing that should change is your contact point for payments and communication. The loan terms should not change, but that’s what this borrower, among many, experienced. After noticing a higher interest rate after the transfer to CornerStone, this borrower started a personal campaign to fix it. Over a dozen phone calls and 9 months later, their loans still had the higher interest rate, even after speaking to a supervisor who assured her they had resolved the error.

In another instance, a borrower received a letter saying that her loans were being transferred to CornerStone but that nothing would change, including her auto-payments. After one payment was smaller than the normal amount taken from her account, the auto-payments stopped completely. To resolve the issue, she mailed a request to start auto-payments again but did not hear back. She and her husband called several times, faxed, and emailed but could not reach anyone.

Lack of Communication

Nothing is worse than needing help with a time-sensitive problem and being unable to reach those who should be able to help. Unfortunately, that’s exactly what many CornerStone borrowers experience when something doesn’t go quite right with their student loans.

While the problems CornerStone borrowers experience are certainly worth concern, the fact that they cannot reach representatives is downright alarming. In too many instances, borrowers’ inability to contact a CornerStone representative resulted in delinquency and negative credit reporting, despite how persistent their contact attempts were.

Many of those borrowers wonder how they are supposed to keep their account in good standing if the servicer is unwilling to even speak with them about potential problems.

Take this borrower: After two failed attempts to make a payment online, they tried multiple avenues of communication to resolve the issue to not miss their due date. All failed, and as a result, their credit suffered. The only communication they received before they resorted to filing a complaint with Better Business Bureau (BBB) was a letter notifying them of the failed payment.

In a similar case, one borrower’s payments consistently sat in pending status before being returned to them. As a result, they kept getting late fees that they were expected to pay off with payments that never went through. When they called in, they could never reach anyone. As they wrote that complaint, they had been on hold for close to 40 minutes.

Some borrowers describe the lengths they went to in order to contact CornerStone Customer Service. Daily attempts for weeks to contact a human went unanswered. All this borrower needed was to be put in forbearance before their payment due date — an action that is routine for other servicers.

They waited on hold for more than 45 minutes every day. Selecting the auto-callback feature resulted in a dropped call every time. Emails and contact form submissions elicited no response. The only success they had in communication was through BBB.

Issues Despite Communication

When borrowers are lucky enough to talk to a representative, they don’t leave the conversation feeling lucky. Instead, they develop a deep distrust of CornerStone when, in too many cases, their requests never get completed. Many borrowers compare their experience to other servicers, who have no problem processing the same request in a timely manner.

Income-based repayment plans require annual recertification or the account switches back to the Standard plan, which can be catastrophic for borrowers who rely on the lower IBR payments. One borrower sent off identical recertification paperwork to their two servicers at the same time. While one was prompt with processing, CornerStone was not.

Instead, they initiated a back and forth to get the information they claimed was missing from the original packet the borrower sent, changing their story about what information they had at any given time. Information they had midway through the process was somehow missing by the end.

Another borrower had trouble submitting an application for a hardship deferment. They faxed and emailed the form to CornerStone four times, but they were still unable to process it. When they weren’t claiming they did not receive the form, CornerStone claimed they did not have all necessary information to process it, but they did not tell the borrower what was missing. 

After several attempts to find out, the borrower was unable to determine what additional information they required. All this happened after their account transferred from Nelnet, who had approved the borrower’s deferment.

Silver Lining

A recurring theme among the countless complaints of impossible communication is a surprising sense of community. It is unacceptable that a company dealing with time-sensitive financial matters — matters that have the potential to make or break individuals’ futures — has such barriers to vital communication.

However, those individuals complaining are constantly demanding that CornerStone’s communication, website, and processes be improved so future borrowers do not have to suffer.

Consider this from a borrower whose in-school deferment was not applied, despite CornerStone’s assurances that it would be applied automatically and that communication from the borrower was not necessary.

Normally, the school sends the servicer notice that the borrower is in school, but CornerStone claims to have never received that notice and continued to bill the borrower, even threatening late fees if they did not pay — all while they were currently enrolled in school.

They said: “I have never experienced such poor service and communication from other loan companies and would like to file a complaint to help ensure that the public is aware of such practices and so that other students will not have to suffer the same difficulties I am currently experiencing.”

That borrower shares that sentiment with countless others. A pessimist might notice that those pleas have gone unanswered, proven by the constant influx of similar complaints. An optimist might find comfort in the sense of community and goodwill.

What everyone should take from these stories is motivation to be proactive. Delays and communication breakdowns don’t happen to everyone, but they are always a possibility, so it’s best to come to the table prepared. When you need to deal with your servicer, do so early, and document everything.

Final Thoughts

If you're not quite sure where to start or what to do, consider hiring a CFA to help you with your student loans. We recommend The Student Loan Planner to help you put together a solid financial plan for your student loan debt. Check out The Student Loan Planner here.

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Have you ever had any of these problems with your student loan servicer?