Student loan servicer problem- IS THE PROBLEM

Updated: Apr 28, 2020

So ultimately there is a problem with Federal and Private Student Loans.

The discussion on student loans in the media almost ALWAYS leaves out private loans. That is a different discussion altogether. More to follow on that topic specifically.

The servicer problem however, IS the problem. There are so many points to go over as to why- which will need a detailed article but we can sum it up.

Servicer Problems Summary:

  1. The government contracts for Federal servicers aren't suitable for this industry

  2. The servicer has defrauded or literally lied to the borrower

  3. The borrower is negotiating with the very people that make money from the debt

  4. The third-party system is frowned upon and resisted by the government

  5. The third-party system because unregulated is steeped with scammers

  6. There actually is a solution- but no discussion thus far about it being comprehensive

There are some proposed ideas- like in this Forbes article.

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FSA is in the middle of an overhaul on the student loan process. Specifically with regard to services and forgiveness.