Nessel calls for more help for borrowers as student loan payments resume
This month, millions of Americans will begin paying their student loans again for the first time in more than three years. The Michigan Department of Insurance and Financial Services has launched a new website helping borrowers navigate the restarting of payments.
The site provides information and resources on budgeting, scam protection and updating info for processors.
“The website is intended as a resource so that Michigan borrowers know what to do, in light of this resumption of student loan payments," said Anita Fox, Director of DIFS.
The website helps borrowers with links to update their personal information, find their loan servicer and apply for income-based repayment plans.
“Suppose that you get ready to pay and you think ‘I can't make that payment, that payment is too much for me.’ It will link you to where you could maybe go for some assistance with that,” Fox said.
Student loan payments were paused for more than three years during the pandemic. In that time, millions of borrowers have had their loan servicer change. Attorney General Dana Nessel signed a letter with 18 other attorneys general, calling on the Biden administration to protect borrowers who run into processing issues.
“The resumption of payments could plunge many Michigan residents into financial hardship and confusion as they navigate the complex federal loan repayment system.” Nessel said in a statement.
Austin Hinkle, senior counsel for supervision policy at the Consumer Financial Protection Bureau, a federal agency focused on consumer issues, said that can cause headaches for borrowers.
“The risk for borrowers is that they may find that some of that important information was lost or misplaced along the way,” Hinkle explained. They receive monthly payment amounts that might not be accurate or their enrollment in something like an income driven repayment plan would have changed in the interim.”
In response to those concerns, the DIFS website will provide info on loan servicer changes. Borrowers can find loan servicer information on the studentaid.gov website, and their monthly payment statement.
The site will also help users look out for scams.
DIFS director Anita Fox said, “The number one rule is never give your information out to anyone who contacts you. If you're not sure it's legitimate or not, hang up.”
Hinkle said that scams usually involve a third party company charging a fee to help with a loan cancellation program or monthly payments. “The worst case scenario for borrowers is when these companies make these types of promises, they collect funds and then they take no action on the borrower's account.”
“This can result in borrowers sort of unknowingly becoming delinquent for an extended period of time and they may not even find out until their loan goes into default or there's other negative actions taken against them.”