The federal government is investigating allegations of botched customer service by loan processing companies over their handling of questions about the resumption of student-loan repayments following a three-year pandemic pause, the Wall Street Journal reported. Borrowers have said that they faced long delays on customer-service lines, with many hanging up after hearing estimates of lengthy wait times, people familiar with the matter said. Borrowers have also complained about the guidance that customer-service representatives or the companies’ automated systems are providing. The Consumer Financial Protection Bureau is leading the inquiry. The probe comes as the federal student-loan system undergoes its biggest changes in decades. Borrowers recently started to make their first student-loan payments since the pandemic hit. Millions are making payments for the first time or had their accounts moved to a new servicer. The government is rolling out generous repayment programs for subsets of borrowers. And the Biden administration is trying again to cancel debt on a large scale after the Supreme Court blocked its first try in June. The government’s scrutiny is focused on the small group of companies with contracts to process federal student loans: Mohela, Nelnet, Edfinancial and Aidvantage, which are routinely examined by the CFPB.
