From Time:

For about 750,000 Americans facing the return to monthly student loan payments, the experience is off to a rough start. The U.S. Department of Education announced it’s punishing three loan servicers for late billing and is offering a new forbearance to affected borrowers. Borrowers have also reported long wait times and hurdles accessing new repayment plans.

The Education Department said it is withholding payment to three student loan servicers and placing affected borrowers into administrative forbearance after finding 750,000 people didn’t receive their bills in a timely manner. Additionally, borrowers have encountered trouble with incorrect bills, delays in signing up for repayment plans, and long wait times when calling customer service.

This isn’t the first time since October that the Education Department has issued penalties for late billing. All this indicates a rocky return to monthly student loan payments for the 28 million Americans who resumed payments in the fall.

The Consumer Financial Protection Bureau’s analysis simply catalogued issues with the rollout, but the Education Department is not giving servicers a free pass for poor performance. Borrowers have faced flawed bills, unaffordable payments, and confusion as they navigated the return to monthly payments after three and a half years. The department is now working with affected borrowers to resolve this issue and restrict payments until it is resolved.

The Consumer Financial Protection Bureau has reported that borrowers are facing long wait times when calling their loan servicers, leading to dropped calls and trouble accessing new repayment plans like the Biden administration’s new Saving on a Valuable Education plan. Many applications for an income-driven repayment plan have been pending for more than 30 days, and borrowers are facing issues like paying more interest and larger payments while applications are stuck in processing.

For some borrowers, these problems have caused further issues in other areas of their finances, leading to situations where they have had to take time off work to get their questions answered. The director further emphasized that the conduct of loan servicers has significant impacts on household finances.

Some experts have predicted many of these issues beyond the initial weeks after the end of the payment pause, particularly the delays in getting help as the end of the payment pause approached. Loan companies weren’t given extra resources to handle the surge of questions from borrowers, which has led to continuing issues for borrowers even through the fall. Despite the corrective actions taken by the department, there are still concerns about the servicers’ ability to implement these orders effectively.



Read more: Student Loan Borrowers Face Billing Errors, Long Wait Times