LANSING, Mich. (Michigan News Source) – Michigan Attorney General Dana Nessel, a Democrat, has joined 19 attorneys general in calling for further protections for borrowers now that student loan payments have resumed. October 1st was the date that over 40 million borrowers were ordered to resume making college loan payments following a three-and-a-half-year pandemic payment pause. This comes after Congress passed a law in June barring further extensions of the payment pause.

AG Nessel says in a statement, “The pause in student loan payments during the pandemic provided critical relief to millions of borrowers. The resumption of payments could plunge many Michigan residents into financial hardship and confusion as they navigate the complex federal loan repayment system. I join my colleagues in urging the Biden Administration to provide robust protections to borrowers against loan servicing errors and bad actors as they try to repay their student loan debt.”

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AG Nessel says that although the Biden Administration has taken significant steps to transform the broken federal student loan repayment system, the coalition of attorneys general believe further action can and should be taken by the federal government to do more to mitigate harm to borrowers. The coalition cautions that current circumstances are likely to create serious and widespread loan servicing problems, especially as the U.S. Department of Education itself appears to lack capacity to assist borrowers, oversee servicers, and enforce borrower protections during the return to repayment.

Nessel goes on to say in her statement, “The transfer of nearly 30 million borrower accounts to new servicers during the pandemic has created the potential for significant and widespread account and servicing errors, including billing problems, inaccurate account information, and placement in incorrect repayment plans. The coalition’s letter reports that borrowers are already filing complaints concerning a lack of timely resolution to such errors, extraordinary call wait times – including hold times in excess of 400 minutes – and delays in receiving assistance from servicers. The letter notes that even some state agencies are having trouble obtaining timely servicer responses through government complaint escalation channels.”

In their letter, the AGs also express concern that many of the reported account issues are affecting low-income borrowers. They go on to explain that although the Administration has opened potential additional avenues toward debt relief, these avenues are of limited use in resolving return to repayment problems and do not address the problem of interest accrual.

In order to offer additional help to students, the Michigan Department of Insurance and Financial Services (DIFS) has announced a recently launched website to provide tips, resources, and assistance to student loan borrowers.

DIFS Director Anita Fox says in a statement about the website, “Hundreds of thousands of Michiganders, including thousands of seniors, have federal student loans and it is important that they know that their monthly payments will begin again soon. Michiganders who are worried about making their student loan payments should remember that repayment plan options may be available to help them lower their monthly payments. We have recently created a website which can serve as a one-stop shop for Michiganders to learn more as they prepare to once again pay their monthly student loan payment.”