December 10, 2020
Student loan servicers say a funding cut by the Education Department forced them to reduce staff. Now they’re about to get flooded by calls from borrowers.
When student loan bills come due again, as early as Feb. 1, millions of confused borrowers with questions or needing help could find themselves stuck on hold trying to get through to overwhelmed loan servicers.
That’s the warning from the companies that will be responsible for working with about 30 million student loan borrowers when a moratorium that’s excused them from making payments since last March runs out at the end of January.
The Pew Charitable Trusts expects the change to cause so much confusion, it estimated that nine million borrowers could call loan servicing companies with questions or to say they can’t afford to pay.
The companies say the possibility of being overwhelmed with calls is exacerbated by the Education Department’s decision last summer to cut their funding, which led them to slightly reduce staff and left them unequipped to handle the large surge in calls they expect if all of the roughly 30 million borrowers who have been excused from making payments are told to begin paying again, at the same time.