Report: Return to repayment found more than nearly 4 million errors

A new report has found that every student loan servicer failed to prepare during the return to repayment following the pandemic, resulting in more than 3.9 million billing errors.

The report, Servicing Scandals: Student Loan Servicers’ Failures During Return to Repayment, from U.S. Sens. Elizabeth Warren (D-MA), Richard Blumenthal (D-CN), Edward J. Markey (D-MA), and Chris Van Hollen (D-MD), looked at servicer failures during the return to repayment and how billing errors and customer service problems harmed borrowers.

“It’s clear that all servicers misled borrowers and screwed up the resumption of student loan repayments, making a whopping 3.9 million errors,” Warren said. “For decades, loan servicers misled and harmed borrowers who have done everything right. It’s time for real action and accountability.”

The report found that student loan servicer—EdFinancial, Maximus, MOHELA, and Nelnet— failed to prepare for the transition back to repayment despite numerous warnings. As a result, the Senators found, millions of borrowers experienced billing-related errors, made unnecessary payments and were denied debt relief due to servicing mistakes.

The report also found that the student loan servicers had a history of failures going back decades that was exacerbated by the COVID-19 pandemic. Additionally, after the three-year pause on student loan payments, collections and interest due to the pandemic, borrowers failed to prepare for the return to payment, resulting in high call wait and email response times; call abandonment rates as high as 48.2 percent and customers service ratings that fell below the U.S. Department of Education’s thresholds.

“The findings of this report paint a harrowing picture, and borrowers deserve justice—these servicers must remedy these harms and resolve this nightmare for borrowers. Student loan debt in the United States is more than $1.6 trillion dollars, impacting over 42 million Americans. For too long, student loan servicers have harmed borrowers with deceitful tactics, including incorrect and late billing statements, low quality customer service, slow processing times, and an overall lack of transparency,” Blumenthal said.

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