Some student loan servicers have recently cut back on customer service hours, adding to the fear that borrowers won’t have sufficient support when transitioning back into repayment after a more than three-year pandemic pause.
There was already concern over whether the critical return to repayment set for later this year would go smoothly after Congress appropriated the Federal Student Aid office about $800 million less than what the Biden administration had asked for this year. The office contracts with several outside organizations to handle the billing and other services on federal student loans.
EdFinancial Services, Aidvantage and MOHELA have reduced the number of hours during which a borrower can reach a customer service representative on the phone, according to CNN’s review of earlier versions of the companies’ websites. None of those three servicers currently have Saturday hours.
Another major servicer, Nelnet, said in March that the Department of Education had modified its current contract, “significantly” decreasing the amount it earns per borrower per month. The company has laid off hundreds of people this year, though customer service hours have remained the same, according to Nelnet’s website.
A spokesperson from EdFinancial referred CNN to the Department of Education. Aidvantage and MOHELA could not be reached for comment.
The Department of Education declined to say whether it had modified student loan servicer contracts across the board, but in an email to CNN said that the agency is “deeply concerned about the lack of adequate annual funding made available to Federal Student Aid this year.”
“The Department remains focused on doing everything in its power to better serve students and borrowers, and we are fully committed to supporting student loan borrowers as they successfully navigate returning to repayment,”…
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