A student loan ombudsman is an independent, objective and impartial mediator. Their job is to help student loan borrowers resolve disputes. They are neutral and do not represent either party in the dispute.
Most lenders and loan servicers have their own student loan ombudsmen. But the federal government has two ombudsmen as well. One federal ombudsman helps federal student loan borrowers while the other works to resolve borrower disputes with private lenders.
In this guide, we'll share tips on how to resolve your student loan disputes on your own before you seek additional help from a student loan ombudsman. We'll also provide the ombudsman contact information for the federal government and for several major lenders and servicers.
Most Common Student Loan Disputes
Many student loan issues arise because of the complexity of the federal student loan system. With so many repayment plans to keep track of, it can be difficult for even the most competent of companies to service federal loans effectively. This is precisely why some federal loan servicers have been dropping out in 2021.
But servicing issues aren't just a federal student loan problem. Private student loan lenders are certainly capable of making mistakes too. Regardless of loan type, the most common student loan disputes include:
- Missing loan payments or loan payments that were not applied correctly
- Incorrect loan balance
- Errors involving interest
- Misleading, inaccurate or incomplete information provided to the borrower
- Inadequate accommodations for the borrower’s financial situation
- Lack of loan repayment options
- Wrong loan status
- Illegal lender collection activities
- Errors in information provided to credit bureaus
- Identity theft
- Problems caused by the merging of two or more servicers
- Problems with quality of customer service
- Problems relating to requirements for loan forgiveness, loan discharge, deferments, forbearances, and reinstating repayment obligations after discharge
- Attempts to collect a student loan that was discharged in bankruptcy
- Problems related to student loan consolidation or refinancing
- Problems related to student loan settlements
- Confusion about the difference between federal and private student loans (or types of federal loans)
Sometimes loan balances that are higher than expected can be for legitimate reasons like interest capitalization, negative amortization, or late fees and collection costs.
But inaccurate loan balances can also be caused by loan servicer error in incorrectly applying a payment or losing a payment. Below, we discuss how to resolve these types of issues when they occur.
How To Resolve Student Loan Disputes On Your Own
First and foremost, stay calm. Dealing with loan problems can get emotional. But try to avoid having it affect your interaction with the lender or loan servicer. Venting may make you feel better, but it doesn’t solve your problem. Don’t make threats.
1. Clarify The Nature Of The Dispute
Start by clarifying the nature of the dispute. What exactly is the problem? What information can you provide relating to the dispute? What is your desired outcome? What are the obstacles to resolution of your dispute?
2. Gather Information
It's helpful to collect key information about your student loans. Questions you'll want to get the answers to at this stage include:
- What is the name and contact information for the lender and loan servicer? (If you don’t know the name of your lender or loan servicer, you can often find this at StudentAid.gov or AnnualCreditReport.com.)
- What is the type of loan?
- Is it a federal or private student loan?
- What is the interest rate?
- What is the due date?
Keep copies of documentation, such as bills, proof of payment (receipts, cancelled checks and bank statements showing an automatic transfer), correspondence (letters and email messages), promissory notes and other proof of your claims.
3. Contact Your Lender Or Loan Servicer
Try to resolve the dispute directly with your lender or loan servicer before filing a formal complaint. Here's the contact information for the current federal student loan servicers:
There are two situations when you might want to call a different number than the ones listed above. First, if the problem involves death, disability, severe illness or similar financial challenges, try calling the lender’s main telephone number and ask for their “compassionate review” process.
Second, if you've defaulted on your loan and you're dealing with a collections agency, the Default Resolution Group is the first place to contact. You can get in touch with them at 1-800-621-3115
4. Document Everything
Keep notes of your conversations with the lender or loan servicer. Write down who you spoke with and the dates and times when you spoke with them, what was said and what you were told. Any details concerning the nature of the problem will be helpful.
If an agreement was reached, follow up in writing to confirm the agreement. Send letters with delivery confirmation or by certified mail, return receipt requested, so that you have proof of receipt.
Ask for a response within a reasonable amount of time, such as within a few weeks. Most borrowers receive responses to their complaints within two weeks.
When To Contact Your Lender's Student Loan Ombudsman
If you don’t get a response from the lender or loan servicer or you're not satisfied with the response, it may be time to contact a student loan ombudsman.
There are several different types of student loan ombudsmen. Start with the lender’s own ombudsman. Here are links to the ombudsmen for several major lenders and loan servicers.
The U.S. Department of Education operates a Feedback Center (1-844-651-0077) where you can submit complaints concerning federal student loans (and other federal student aid) in addition to using the ombudsman.
It's best to wait a few weeks after submitting a complaint before moving to the next step of reaching out to a federal ombudsman. The lender may respond to the complaint and eliminate the need to escalate the issue.
When To Contact A Federal Student Loan Ombudsman
If working with the lender directly or through its ombudsman fails to yield a resolution, then turn to the federal or state ombudsman. The state ombudsman is usually an office within the state attorney general or state higher education agency.
There are two federal ombudsmen — one for federal student loans and one for private student loans. Here's how to contact them.
Federal Student Aid Ombudsman
The Federal Student Aid Ombudsman, also known as the FSA Ombudsman, deals with Direct Loans, Federal Family Education Loans (FFEL), Federal Perkins Loans and other federal student aid. They can be reached by telephone at 1-877-557-2575 or 1-202-377-3800 or by fax at 1-606-396-4821 or 1-202-275-0549.
The FSA Ombudsman will research the problem and work with you and the lender, loan servicer or collection agency to resolve the dispute. They can:
- Identify and evaluate options for addressing your concerns
- Clarify the requirements for deferment, forbearance, cancellation and discharge
- Explain how interest, late fees and collection charges work
- Review your loan payment options
The FSA Ombudsman does not have the authority to overturn decisions of other entities. But, they have a strong track record of success in resolving disputes. If necessary, they will refer you to the appropriate office or organization and provide them with clear information about the nature of the dispute
Private Student Loan Ombudsman
The Private Student Loan Ombudsman is provided by the Consumer Financial Protection Bureau (CFPB). You can submit a complaint online by calling 1-855-411-2372 (TDD 1-855-729-2372).
It can be helpful to look at the CFPB’s consumer complaint database to see how similar problems have been resolved. Seeing how other issues have been addressed could help you phrase your complaint in a way that gives you the best chance of receiving a satisfactory resolution.
Other Resources For Resolving Student Loan Disputes
If you've followed all of the steps above and haven't received a satisfactory resolution to your student loan complaint, you still have a few options. For many borrowers, their next step should probably be to file a complaint with the FTC or Better Business Bureau (BBB).
U.S. Department of Veterans Affairs (VA). Veterans who are attending or attended a college through the G.I. Bill can file a complaint with the VA GI Bill Feedback System. Military spouses and dependents can also seek help through Military OneSource.
Airing your grievance through social media like Twitter and Facebook can sometimes put public pressure on the company to resolve your dispute. And, finally, your member of Congress may be able to help as they have aides who focus entirely on helping constituents resolve problems with the federal government.
Mark Kantrowitz is an expert on student financial aid, scholarships, 529 plans, and student loans. He has been quoted in more than 10,000 newspaper and magazine articles about college admissions and financial aid. Mark has written for the New York Times, Wall Street Journal, Washington Post, Reuters, U.S. News & World Report, MarketWatch, Money Magazine, Forbes, Newsweek, and Time. You can find his work on Student Aid Policy here.
Mark is the author of five bestselling books about scholarships and financial aid and holds seven patents. Mark serves on the editorial board of the Journal of Student Financial Aid, the editorial advisory board of Bottom Line/Personal, and is a member of the board of trustees of the Center for Excellence in Education. He previously served as a member of the board of directors of the National Scholarship Providers Association. Mark has two Bachelor’s degrees in mathematics and philosophy from the Massachusetts Institute of Technology (MIT) and a Master’s degree in computer science from Carnegie Mellon University (CMU).