Question: The Department of Education has created a new position called the Student Loan Ombudsperson. This office has been directed by Congress to be available to assist students who are having problems with their student loans. You can reach the Ombudsperson through the internet at http://sfahelp.ed.gov or their phone number is 877.557.2575.
My opinion belongs to me and no one else…especially my wife.
Answer: The page at http://sfahelp.ed.gov/ is a product of the U.S. Department of Education. The page describes itself as the OSFA Ombudsman page, where OSFA is short for Office of Student Financial Assistance.
Some people may be concerned that this Ombudsman does not appear to be independent of the Department of Education. Also, I cannot help wondering whether this will just turn out to be a different approach to the same goal, i.e., to persuade people to pay student loans by letting them know that someone feels bad for them but can’t really change the underlying fundamentals.
Bear in mind, of course, that the party paying for a toll-free number can see which number you’re calling from; I’ve had the spooky experience of having the person at the other end of an 800 number tell me who I was, and where I was, as soon as they answered the phone. I assume the Ombudsman’s 877 number works the same. Also, their online form says they won’t respond unless you supply your social security number.
I haven’t looked into the statutes or regulations authorizing the creation or purpose of the Ombudsman, to learn exactly how Congress or the Department described those matters. My dictionary says that an ombudsman is “a government official who hears and investigates complaints by private citizens against other officials or government agencies.” The FAQs page says it like this: “An ombudsman resolves disputes from a neutral, independent viewpoint. The OSFA Ombudsman will informally conduct impartial fact-finding about borrower complaints. We will recommend solutions, but we won’t have the authority to reverse decisions. We will also work to bring about changes that will help prevent future problems for other student loan borrowers.”
The FAQs page also says, “We will not accept complaints about grants or private sources of student financial aid. We also won’t accept complaints when the U.S. Department of Education has already begun formal or legal investigations. The OSFA Ombudsman will only accept complaints about Direct Loans, FFELP Loans, Guaranteed Student Loans, and Perkins Loans.”
They recommend starting by talking to your lender, school, or whoever is at the root of the problem. For Perkins loans, they say that many schools have administrative review processes or ombudsman services. For other types of loans, they recommend a similar process through your lender or guarantor. They say you should ask to speak to a supervisor, keep detailed records of your phone calls, etc.
If you go to the Ombudsman after taking those steps, they say they “will informally research your problem and determine if you have been treated fairly. If your student loan complaint is justified, we will work with you and the office, agency, or company involved in the problem.” They say, “It’s best to think of the Ombudsman as a last resource. We will try to help when other approaches have failed.”
The site offers, or hopes to offer, FAQs on repayment issues pertaining to specific kinds of loans — for example, cancellation of a Perkins loan for teaching in certain areas. They also address a few points about the treatment of student loans in default and bankruptcy situations.
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