In the deluge of complaints about a troubled program that repays student loans for people who work in the public service, one stands out for its frequency: thousands of people say they have been misled by loan officers working on behalf of the US government.

This is one of the thorniest issues in a program that has become a notorious quagmire, with a rejection rate of almost 99%. Lawmakers, consumer advocates and desperate officials say the education ministry should create a formal process to appeal denials, especially denials that borrowers say have been affected by provider mistakes Services.

But it turns out the Department of Education already has a system for investigating complaints and making corrections – it just keeps it very quiet.

At a training conference for financial aid professionals in December, a program specialist in the Department of Education said during a presentation that if the agency finds out that it or the services it hires “have done something wrong”, it will “hold the borrower harmless as a result”.

Those who believe they have been wronged by a repairer’s error should file a complaint explaining what happened during the repair. Feedback system of the Federal Office for Student Aid on the StudentAid.gov site, the specialist, Ian Foss, said during his presentation. Who routes complaints to the agency’s mediation group, and the ministry will investigate and attempt to confirm the borrower’s account.

It surprised many in the room.

“I was legitimately surprised,” said Ryann Liebenthal, a journalist who writes a book on student debt and asked the question that prompted Mr Foss’ response. She had never heard of the department’s dispute resolution system.

But the agency investigated hundreds of claims from borrowers and found that they had received inaccurate advice or otherwise misled by a service agent, according to agency records and interviews with current and former government officials. After verifying their claims – using whatever records it could get, including the call records that most agents keep – the ministry adjusted the accounts of these borrowers using what is known as internally. a “replacement” credit.

Yet few borrowers know about the appeals process – and even government auditors think it’s a problem.

In one report last year, the Government Accountability Office found that “there is no formal process for dissatisfied borrowers” to challenge decisions and that the Department of Education does not fully inform borrowers of their borrowing options. ‘appeal, including the mediation group.

The obscurity is intentional: The education ministry does not advertise the feedback system because manual investigations take time, according to three people familiar with the matter.

This frustrates advocates for borrowers.

“The Education Department has a secret process in place that only helps a number of borrowers get back on track when a student loan company has denied them their rights,” said Mike Pierce, Policy Director of the Student Borrower Protection Center. , an advocacy group. “Companies need to be held accountable and the department needs a real solution. “

The Department of Education is the largest lender for Americans who borrow for higher education, holding $ 1.3 trillion in debt owed by more than 35 million people. He relies on a handful of companies hired to service his loans and help borrowers navigate dozens of repayment options.

But the problems are many, according to government audits and lawsuits against companies, especially with the Public service loan remission program. The program aims to attract workers to vital but often low-paying professions with the promise of eliminating their student debt after a decade.

Any mistake along the way can trigger a cascade of problems – and so far almost all of the 109,000 people who have applied for their loan cancellation have been turned down, according to the latest data from the department. (As of September 30, only 1,139 had passed.)

Most of those who were turned down misunderstood or had not yet completed the program requirements. But sometimes service agents made mistakes, such as telling borrowers they have the right plan when they don’t, or advising them not to consolidate loans that needed to be consolidated to become eligible for the loan. discount. For example, anyone who borrowed in 2010 or earlier under the ministry’s federal family education loan program must consolidate their loan into a new direct loan.

Such “bad loan” problems are particularly difficult to resolve, unless the borrower finds and follows the claim option.

A successful call came from a borrower who said in her complaint that her agent told her that the payments she made on her federal debts for family education would count towards the 120 payments required for the program. of discount. When the ministry investigated and verified his claim, it adjusted his account and credited his non-qualifying loan payments to her, according to a ministry official who worked on the case.

The dispute resolution process is not directly described on the websites of the ministry’s loan managers – including FedLoan, the sole public service program manager – or on the Public service loan forgiveness information site.

Education Ministry spokesperson Angela Morabito said the ministry’s website “tells borrowers exactly what to do” if they think they have a problem with their request for service loan cancellation. public: contact FedLoan. The ministry’s website “informs them of the possibility of providing additional information and documents so that the loan manager can reconsider his decision,” she said.

But when asked to explain how it helps borrowers who have issues with other services or who have fallen victim to a mistake by FedLoan itself, she cited the poorly advertised appeal process.

“If a borrower is not satisfied with the review, the borrower can also file a complaint through the FSA’s feedback system,” she said.

Frustrated borrower Jessie Belote, a teacher from Michigan, said she spent almost two years trying to solve a complicated issue with FedLoan. (This is not uncommon: the company has told many borrowers that they will have to wait months or years to have their complaints investigated.) Every few weeks she would call the company and every call she would be told to keep waiting.

Then she found an online support forum, where other borrowers advised him to file a complaint with the Ministry of Education ombudsman. She did it in early November. The following month, FedLoan responded to him and spent hours correcting errors on his account. The errors are now, finally, almost resolved, she said – but the process was maddeningly obscure.

“The officers don’t tell you how to file a complaint with the education department,” Ms. Belote said.

In one complaint filed last year against FedLoan, New York Attorney General Letitia James lambasted the duty officer for failing to tell people who might have been eligible for waivers that the option existed.

“FedLoan does not systematically inform borrowers, even borrowers who are complaining, of the possibility of seeking recourse,” Ms. James said. written in his complaint. “It’s usually only the most persistent borrowers, or those in a position to call on outside help, who even have the option of requesting a waiver. “

Keith New, spokesperson for FedLoan, said the company “cannot comment on the details of the lawsuit.”

The Education Ministry said it did not have data on how many times it had used the waiver process, but details in its annual reports on federal student assistance give some leads. Last year, the ministry investigated 1,520 complaints about problems with civil service loan cancellations. He made changes to the borrower’s account in about 500 cases.

Representative Robert C. Scott, who introduced legislation last year to create a standardized appeals process for the civil service program, said there was a “worrying lack of urgency” at the department. Education to help borrowers solve problems.

“No one seems to be aware of the current process,” said Scott, a Democrat from Virginia who chairs the House education committee. “You have people who have dedicated their lives to public service jobs based on this promise of release after 10 years. They should get the benefits that have been promised to them.

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