Each year, the CFPB hears from thousands of consumers with student loans who report a range of problems with their student loan servicers. Your student loan servicer is the company you submit your student loan payment to every month. Many of you have reported a range of servicing problems that may be driven by incomplete, inaccurate, or untimely information about what’s called your “enrollment status.”
Your enrollment status is a record of the dates you have been enrolled in college, including whether you are currently enrolled and your expected graduation date. This information can affect your life in important ways. For example, this information can matter when you need to pass a background check to get a job.
For millions of student loan borrowers, this information also helps determine when you must begin to repay your student loans and drives how student loan interest charges are calculated and when any unpaid interest can turn into principal.
Bad information about borrowers’ enrollment status can have serious financial consequences. It can cost some borrowers hundreds in additional interest charges, and lead to unexpected loan bills and lost eligibility for other student loan benefits.
That’s why we released this new consumer advisory warning you to watch out for red flags and to take action when something doesn’t look right. We also published a taking a closer look at the problems borrowers identify when a servicer uses incomplete, inaccurate, or untimely information about their enrollment status.
Bad information about your college enrollment status can cost you
As student loan borrowers pursue a degree, leave school, or return to school, they have reported a range of problems at every step, driven by incorrect information about their enrollment status. The CFPB has heard about:
- Unexpected student loan bills for borrowers enrolled in school full time. Student loan borrowers have submitted complaints to the CFPB describing costly payments they should not have had to make, negative credit reporting resulting from “delinquent” student loan payments, and increased costs when any unpaid interest can turn into principal. These borrowers ran into trouble when their student loans unexpectedly entered repayment status even though they were enrolled in school full time and no payments should have been due.
- Surprise delinquencies or unexpected loan bills for borrowers leaving school. After inaccurate enrollment dates are corrected, loan bills can be back-created for borrowers. For example, one borrower described how, after his servicer automatically updated inaccurate information about the date he left school, his servicer sent him a new back-created, past-due bill for several months of missed payments, billing him for hundreds of dollars more than what he was originally told.
- Difficulty accessing deferments while still in school, leading to extended periods of costly payments for borrowers returning to school. Borrowers returning to school can often defer payments on their existing loans when they re-enroll at least half-time. The Bureau heard from borrowers returning to school that it can take months for servicers’ systems to accurately reflect their changed enrollment status, requiring them to continue making payments during this period despite being eligible for in-school deferment. Some borrowers reported making years of unaffordable payments after returning to school. Other borrowers reported that delays in properly applying in-school deferments caused surprise late fees and damage to their credit. One private student loan borrower told us:
“[My servicer] … claims they have no record of my enrolling in school (no other lender has this issue) ... I should not have been charged for the past two years. As a student on a tight budget, I had to take out additional loans in order to cover those monthly payments, and when I could get someone on the phone last year, they told me there was nothing I could do that year, but wait for the [third-party enrollment reporting company] to update my info for the second year. That never happened, and they are still billing me as the third year of school begins.”
- Roadblocks correcting or updating inaccurate information about borrowers’ enrollment status. Borrowers complain that they were unable to get errors resolved related to their enrollment status. These borrowers described a series of unsuccessful encounters with different personnel, including staff at their college, the customer service representatives at their college’s enrollment reporting company, and their student loan servicer’s customer service staff. In some cases, the Bureau heard about borrowers losing eligibility for benefits or protections tied to their enrollment status despite providing proof of their enrollment. Other borrowers have also reported that even when they correct enrollment status errors with their servicer, they are often placed back into the wrong enrollment status again.
Three tips to catch errors that could cost you hundreds in additional student loan debt
With these challenges in mind, the CFPB compiled a few tips to help you steer clear of these challenges when repaying your student loans.
1. Make sure to monitor your enrollment status, especially if you recently left or if you return to school.
- When you’re leaving school, make sure you know when your first payment is due. Your servicer uses your expected completion date to time the start of your student loan payments. Colleges report graduation dates differently and this date may be earlier or later than you expect. If you have already used your grace period or don’t have a grace period for your student loans—meaning you must immediately begin or resume making payments once you are no longer in school—knowing when your first payment is due is especially important to avoid surprise bills.
- Tell your servicer if you’re going to leave college early, or if you’re heading back to school. It can take time for your loan servicer to get updated information from your school on your enrollment status, which can cause delays when you want to manage your loan payments. Proactively informing your servicer can help avoid missing payments or making monthly payments you may not be able to afford. Pay special attention if you are leaving school before your expected graduation date or are returning to school after you have begun paying back your loans.
2. When something doesn’t look right, tell your servicer to fix it.
Errors in your enrollment status can occur as information is passed through several different data systems. Work with your student loan servicer to correct any wrong information. Explain to them what you think is wrong and why. Here are two steps you can take to quickly correct enrollment status errors on your own:
- Verify your enrollment with your student loan servicer. Your servicer may be using outdated or inaccurate information to manage your loans. You can submit updated documentation from your college to your servicer confirming your enrollment.
- To get the most up-to-date information, check up on your enrollment status with your school. Contact the registrar’s office at your school to ensure that your enrollment status is being reported correctly. Your school may have a process in place to provide documentation that certifies your enrollment. If you recently transferred or returned to school you can also update your information on the Department of Education’s .
3. If you run into trouble, submit a complaint.
If you have a problem getting accurate or timely information about your enrollment status from your servicer, you can submit a complaint online or call the CFPB at (855) 411-2372. If you want to learn more about student loan repayment options, you can also check out Repay Student Debt, the CFPB’s tool to help you understand your options to repay your loans.
Seth Frotman is the CFPB’s Student Loan Ombudsman. To learn more about our work for students and young consumers, visit consumerfinance.gov/students.