RSSActive duty and veteran college students face challenges in receiving assistance from student loan servicers, according to a Consumer Financial Protection Bureau report on the top concerns facing servicemembers, veterans and military families.
Some colleges and universities withhold transcripts to collect debt or disputed fees, which can lead to a loss of opportunities in both employment and education, according to the Sept. 24 annual report.
More than 400,000 consumer complaints have been submitted from servicemembers, veterans and their families since the CFPB was established 13 years ago. Last year, the number of such complaints increased 27 percent to 84,600, according to the bureau. Increases were seen across consumer financial products — debt collection, credit cards, mortgages, checking or savings accounts, and credit or consumer reporting.
Servicemembers — especially those stationed abroad or deployed — allegedly faced particular challenges once federal student loan payments restarted in October 2023 following a three-year pause. Some servicemembers reported spending hours trying to reach their student loan servicer. They also reported that the outreach often failed to solve their issue, or the companies’ callback features were not working.
“This challenge is particularly acute for servicemembers stationed overseas because the time-zone differences may further limit servicemembers’ ability to reach their student loan servicer during regular call center hours,” according to the CFPB.
Many servicemembers claimed servicing errors were preventing them from enrolling in income-driven repayment plans and that their loan servicers were not correctly calculating monthly payment amounts. Using an incorrect income amount to formulate a monthly payment under an income-driven repayment plan can lead to higher payments or impact eligibility for a loan forgiveness program for government employees, according to the bureau.
Older veterans reported falling prey to fraud or scams, especially on money transfers or servicing and virtual currencies. “Servicemembers who have worked hard to get an education while serving our country should not face additional obstacles that cause financial strain or put career opportunities at risk,” said CFPB Director Rohit Chopra. “The CFPB is committed to supporting and protecting the financial well-being of servicemembers, veterans and their families.”
