The nation's top consumer finance watchdog meant to help you with your student loans is getting another makeover.
Here's what you need to know.
Major Plan To Weaken or Minor Organizational Change?
According to a new memo from Mick Mulvaney, acting director of the Consumer Financial Protection Bureau (CFPB), the CFPB will eliminate its student loan office and combine with a financial education office.
Some view the move as another example of weakening the consumer finance watchdog.
The concern among Democratic lawmakers and other consumer advocates is that this represents a deliberate weakening of the primary office in the federal government charged with protecting student loan borrowers from predatory practices. By combining the office with a financial education office, they argue, the oversight and regulatory component vanishes.
The Office For Students and Young Consumers traditionally has reviewed consumer complaints, interacted with state attorneys general and recommended policy and regulations to protect consumers.
The office has also returned more than $750 million to student loan borrowers from companies who allegedly wronged them.
The CFPB said the organizational change was immaterial, and is part of Mulvaney's plan to save taxpayers money and reduce bureaucracy.
So, if you have a student loan complaint, where do you turn now?
The good news is that you can still try to work directly with your student loan servicer and seek to minimize potential issues by following these steps.
3 Steps To Take With Your Student Loan Servicer
1. Always communicate in writing
While calling your student loan servicer may be convenient, make sure to put all correspondence in writing.
This includes formal requests, payment instructions and any other material issues related to your student loans.
When you keep an organized paper trail of your correspondence, you will have all supporting documents in one place in case of any issues.
2. Sign up for automatic payments
Enrolling in automatic payments is a must-do for any student loan borrower. Why? With automated payments, you minimize the risk of underpaying for your student loan servicers or making a late payment.
In many cases, you may be eligible for a 0.25% interest rate deduction when you enroll in automatic payments.
The preferred method is to enroll directly with your student loan servicer's online platform (rather than through your bank) so that you can create a direct paper trail in case of any dispute.
3. Understand all your student loan options
Do your homework, invest the time and get informed.
Your financial situation is unique, and therefore you need to find the option that is in your personal best interest.
While you can't directly change your student loan servicer, you may be able to change your student loan servicer when you consolidate or refinance student loans.
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