U.S. Education Secretary Betsy DeVos (AP Photo/Ross D. Franklin)
If you’ve ever had a complaint about your student loans, this new memorandum may help you.
Here’s what you need to know.
Memorandum of Understanding
The U.S. Department of Education and Consumer Financial Protection Bureau (CFPB) signed a Memorandum of Understanding (MOU) – essentially a cooperation agreement – to address and better manage student loan complaints. The agreement calls for the Education Department and CFPB to meet quarterly and share complaint information, data, recommendations and analytical tools. Importantly, the MOU more clearly defines role and responsibilities.
“All student loan borrowers, whether they have a Federally-held or private student loan, deserve world-class service and quick resolution when facing issues,” DeVos said. “Through this new agreement with the CFPB, we will coordinate our regulatory efforts, avoid needless duplication, and protect the borrowers we serve.”
Student Loans: Roles and Responsibilities
The MOU splits roles and responsibilities as follows:
- The Education Department will handle federal student loans, including origination, insurance and guarantees; and
- The CFPB will handle private student loans and issues with student loan servicers.
Complaints related to both federal and private student loans will be shared with both the CFPB and Education Department. Any complaints submitted through the incorrect website will be shared and referred. For example, if a private student loan complaint is submitted through the Education Department website, the Education Department will refer the complaint to the CFPB.
In November, Student Debt Crisis, a non-profit student loan advocate, sued the CFPB for, among other things, allegedly failing to supervise student loan servicers, and allegedly for “wrongly assert[ing] that [it] only has authority over [private student loans], which account for less than 20% of student loan debt.”
Your Next Steps
If you have a student loan complaint, it’s important that you know your rights and options.
1. You have several student loan options
When it comes to your student loans, make sure you understand all your options. Don’t rely on what your student loan servicer tells you to do. For example, make informed decisions about student loan refinancing, student loan consolidation, student loan repayment and student loan forgiveness.
2. Keep good records
If you have a student loan complaint, make sure you have evidence. This may include correspondence with your lender or student loan servicer as well as a record of your student loan payments. It’s always better to communicate in writing.
3. File a complaint
If you feel you have been wronged by your student loan lender or servicer, you can send a formal complaint to the U.S. Department of Education, CFPB, your lender or student loan servicer. You can also contact the Federal Trade Commission (FTC) or your state attorney general.
4. Pay Off Your Student Loans Faster
Do you have an issue with your lender or student loan servicer? Then, it may be time to ditch both. This student loan calculator shows you how much you can save when you pay off student loans faster.