A 'fix-it form' for private student-loan servicer issues

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More than seven million Americans with federal student loans are in default. To file a complaint about a federal loan, help is available at the Department of Education's website.

If your student-loan servicer is making life difficult, you're likely in good company.

Americans wanting to repay their student loans - and, especially, keep the balance out of default - often are stymied by the loan servicers themselves, according to a new Consumer Financial Protection Bureau report.

On Thursday, a CFPB ombudsman revealed borrowers' complaints about the very companies that are supposed to help them pay back their student loans. The report analyzed complaints submitted between Oct. 1 and May 31. During that time, the CFPB handled about 3,500 complaints relating to private student loans and 1,500 debt-collection complaints related to private and federal student loans. During the last three months of the period, the bureau said, it also began handling complaints about problems managing or repaying federal student loans, and handled 2,400 federal student-loan servicing complaints during that time.

The chief offender, the ombudsman said, was Wilmington-based Navient, about which the federal agency received 1,210 complaints. And that was just between October and May.

The CFPB also dinged AES/PHEAA, Sallie Mae (from which Navient was spun off in 2014), Wells Fargo, Transworld Systems, and ECMC, the firms with the most student-loan complaints ranked by volume for the period.

"Student-loan servicers continue to fall short when it comes to helping borrowers address $1.3 trillion in student debt," CFPB director Richard Cordray said in a statement. "It's time servicers focus more effectively on processing applications for income-driven repayment plans properly."

The breakdowns "stack thousands of dollars of hidden costs on the backs of borrowers who can least afford them," said CFPB student-loan ombudsman Seth Frotman.

"Too many student-loan borrowers are struggling to take advantage of their right to pay based on how much money they make," Frotman said. "Servicers who want to better serve their customers can take the immediate steps recommended in this report to clean up this broken process." (Go to http://www.consumerfinance.gov/ for the full report.)

To help borrowers, the CFPB is publishing a prototype "Fix It Form" to improve the level of service for federal student-loan borrowers.

At http://files.consumerfinance.gov/f/documents/201608_cfpb_FixItForm.pdf, print out the form and complete it for inclusion with your submission to your servicer. Follow the instructions through the rest of the process.

Afterward, if you're still having problems with your student loan, including unexpected delays or surprise rejections when applying for income-based repayment, submit a complaint online to the CFPB (http://www.consumerfinance.gov/complaint/) or call 855-411-2372.

To file a complaint about a federal student loan, go to the Department of Education's website

(https://feedback.studentaid.ed.gov).

Of the nearly 42 million Americans with federal student loans, more than seven million are in default; almost three million more are at least one month behind.

Anyone who wants to repay federal student debt has seven options  (for these loans, consumers must go through a servicer under contract with the federal government), including REPAYE, which was set up in December. To find the right repayment plan for you; learn how to make payments; get help if you can't afford your payments; or see which circumstances might result in a loan being forgiven, canceled, or discharged, go to the Education Department site:

https://studentaid.ed.gov/sa/repay-loans.

According to the CFPB report, borrowers with federal student loans encountered two main problems:

Repayment options. Some borrowers were driven into short-term alternatives such as forbearance over longer-term options.

Recertification. Student borrowers have to recertify income and family size every year. Also, applications are often rejected for no apparent reason.

For more information on the various types of loans and options, visit www.consumerfinance.gov/paying-for-college/repay-student-debt.

If you're still in need of help, try the nonprofit National Consumer Law Center's Student Loan Borrower Assistance Project (http://www.studentloanborrowerassistance.org/), a resource for borrowers, their families, and advocates representing those with student loans. It doesn't give legal advice in individual cases, but can refer you to a lawyer.

NCLC may refer you to Community Legal Services in Center City or North Philadelphia, or to consumer advocate Clarifi.org.

Hill International, Round 3. Activist investors in Hill International last Monday sued in Chancery Court in Delaware, alleging that the Philadelphia-based construction-management company postponed its annual shareholder meeting at the last minute to avoid "certain defeat" in an election to replace three directors.

In its suit, Bulldog Investors L.L.C. claimed it had enough proxy votes to elect its slate of director nominees to Hill's board, but the Aug. 11 annual shareholder meeting in Philadelphia was canceled.

In a press release that same day, Hill said its board had been expanded from nine to 11 members.

"Rather than accept their fate and the will of the shareholders, defendants purported to cancel that meeting by issuing a press release shortly before it would start," the Bulldog complaint states. "In effect, they tried to use the corporation machinery to cheat."

Bulldog is asking the court to declare that its slate of nominees has been validly elected, and that any action the company took after the Aug. 11 meeting was supposed to start is void.

A new shareholder meeting has not yet been scheduled, the company says.

earvedlund@phillynews.com

215-854-2808@erinarvedlund