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February 4, 2015

Misinformation and Miscommunication Between Borrowers and Loan Servicers

The National Association of Student Financial Aid Administrators (NASFAA) surveyed financial aid administrators finding a “large amount of misinformation and miscommunication between borrowers and the student loan servicers that collect their monthly payments.

”Financial aid administrators have a front seat when student loan servicing goes wrong -- and when it goes right,” said NASFAA President Justin Draeger. “These recommendations are built on the experiences and observations from professionals who want to ensure all borrowers can meet their financial obligations in a clear, fair, and manageable way."

The report recommends that the Department of Education take the following steps:

  1. Develop a central loan portal where students can manage all of their loans.
  2. Remove servicer branding from communication with borrowers.
  3. Provide standard consumer protections for student borrowers that are in line with other consumer financial products.
  4. Permit the use of innovative technologies in order to allow servicers to more efficiently and effectively communicate with borrowers.
  5. Incorporate the regulatory requirements of entrance and exit counseling into the Department of Education’s Financial Awareness Counseling Tool (FACT).
  6. Develop a policies and procedures manual for servicing.

Read the full report here. 

By Heather | Category: Student Loan Policy, Student Loan Repayment  
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