Student Loan Report Claims Student Loan Servicers Failed You During the Covid-19 Pandemic

A new report shows that your credit score may have been damaged by your student loans.

This is what you need to know:and what it means for your student loans.

Student loans

Several student loan servicers, the companies that manage your student loan payments, allegedly made major mistakes during the Covid-19 pandemic, which may have directly affected your credit score. Those are the accusations within a shocking report, which describes large-scale errors related to your student loans that were larger than previously known. The report makes several alleged claims, including:

1. Student loan payments were not reported correctly

The Cares Act, the $ 2.2 trillion stimulus package, allowed student loan borrowers to pause their student loan payments during the Covid-19 pandemic. However, the report details tens of thousands of new cases in which student loan servicers failed to report the correct payment status of student loans to credit reporting agencies. Simply put, even though you weren’t required to make a student loan payment, your student loan servicer may have told the credit reporting agencies that you were behind on your student loan payments. The report notes that, if true, this misinformation would violate the rights of student loan borrowers under the Cares Act, as well as federal, state and federal consumer protection law, including the Fair Credit Reporting Act. For example, according to a lawsuit last May, Great Lakes, a leading student loan servicer, incorrectly reported to credit reporting agencies that nearly 5 million borrowers he had defaulted on his student loans. As a result, these student loan borrowers may have suffered damage to their credit scores, which could have hurt them financially during the Covid-19 pandemic.

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