When the COVID-19 outbreak hit U.S. soil in early 2020, lawmakers were quick to provide Americans with much-needed financial relief. One of the steps it took to do so early on was to hit pause on federal student loan payments, giving borrowers the option to focus on things like putting food on the table rather than worry about that debt.
That early 2020 pause ended up lasting well more than three years. And at one point, many borrowers may have been convinced that they'd be let off the hook from repaying their student loans altogether.
Image source: Getty Images.
President Biden actually tried to make that happen by attempting to broadly forgive a limited amount of student debt. But the Supreme Court shot down that plan several months ago. As such, federal student loan payments were allowed to resume in October. And that's no doubt been a tough transition for a lot of people.
Compounding the problem, however, is that there are numerous reports of student loan borrowers being charged the wrong monthly payments. And if that happened to you, it's important to take action.
A rocky start to student loan payments resuming
Student loan servicers had plenty of warning that debt payments were going to start coming due in October. In spite of that, a recent U.S. Department of Education memo called out the fact that the resumption of student loan payments has been far from smooth. And a big reason is that student loan servicers have been sending borrowers monthly loan statements with amounts that are incorrect.
Specifically, 78,000 borrowers were identified as having received incorrect monthly bills under the Biden Administration's new SAVE repayment plan. The SAVE plan was designed to help make student loan payments more manageable for lower earners in particular. And it allows student debt to be forgiven at an earlier point in the repayment process than traditional income-driven repayment plans. But apparently, at least some of the loan servicers responsible for collecting payments under the SAVE plan dropped the ball to a large degree.
The Department of Education also said that more than 21,000 borrowers received bills for very high amounts in October. One borrower, in fact, received a bill for $108,895.19. The reason was pinpointed easily -- their loan servicer had accidentally taken their total balance and reduced their repayment period from 120 months to a single month.
Clearly, a mistake like that is easy enough to spot. The problem, though, is that errors that are far less glaring may not be immediately obvious to borrowers. That could leave some people paying more toward their student loans on a monthly basis than they're required to.
Take action if your loan statements seem off
If the number your student loan servicer tells you that you owe is different from the number you expected to owe, don't just send in a check and shrug it off. Instead, contact your loan servicer and call out that potential error.
But prepare to exercise patience in doing so. Student loan servicers have reduced their call center capacity, the Department of Education has found. And so if you need to get in touch, you may end up being subjected to lengthy hold times for calling in.
That's obviously both annoying and unfortunate. But it's better to subject yourself to an hour of hold music than to fork over extra money each month that you really can't afford to part with.
