Sometimes the audacity of these lenders and loan servicers just blows you away! And sometimes, the context is even stranger than you might think.
For instance, a lot of borrowers who went to school in the state of Minnesota may have taken out what’s called a SELF loan. The terminology is a little confusing, but essentially, the SELF loans are administrated by the Minnesota Office of Higher Education.
Sounds great, right?
Except that if you listen to what’s on the grapevine, you understand just how many borrowers are left incredibly frustrated, and feeling really taken advantage of, to the point that they hire lawyers to go up against this lender.
It’s a particularly volatile time right now, for sure, and the “Biden pause” ending means that borrowers are scrambling to deal with new payment plans.
But for those unlucky enough to have signed on to SELF loans, things can get very dicey indeed…
This doesn’t come completely out of the blue for those who have heard about other state offices under fire. For example, regulators have taken on MOHELA in Missouri for some of the common complaints about the office’s work, including “making borrowers delinquent” without due process, and note communicating on loan status when necessary.
But it’s still a shock, in many ways, to SELF loan holders who may have been promised a lot up front, or who had been led to believe that this kind of thing doesn’t happen in Minnesota!
Three Ways to Know What the MOHE Is Up To
Let’s talk about three major ways that you can find out about all of the shenanigans going on with SELF loans from MOHE.
Stories From Borrowers
First of all, when you look into forums and places on the Internet where people share their experiences, you see abundant stories of problems with SELF loans. You see the usual – lack of communication, and misrepresenting loan status – but you also see things like abruptly closing accounts, in a way that doesn’t measure up to what lenders are supposed to apply in good faith efforts.
“Apparently, Self has an internal process for regularly evaluating their customer’s accounts,” writes Amanda Garland. “If they note suspicious activity or potential fraud, they will close the account. Often, without warning the customer until they have already done so. Doing so not only frustrates these customers, it can cause credit reporting problems as it can take months for the account closure to be correctly reported to all credit bureaus.”
If those kinds of stories weren’t enough, there’s more!
Check Out the Website
You can also do your own research and see just how dysfunctional these types of loans are.
If you go to the office’s own website, and click into frequently asked questions, you’re going to find – get this – an error message from your browser.
That’s one of those warning signs that you’re not dealing with a loan servicer that is going to be 100% on the ball…
But it gets a lot worse.
Documenting Borrower Experiences
We are in possession of specific communications from lawyers involved in a challenge to the SELF loan administrator.
What you can see from these documents is that the borrower had to secure legal counsel, who then sent letters to point out the problems inherent in the SELF loan administration including, of course, misrepresenting loan status and failing to apply legitimate forbearance opportunities.
But again, there’s also a negligent lack of communication, and that means nobody can actually figure out what’s going on with the loan. These are the kind of situations where the borrowers need to hire lawyers. Lenders and loan servicers often ignore any communications from borrowers – but they can’t legally ignore the attorneys. They have to change tack at least a little bit.
The documentation that we’ve collected, though, shows how the lenders still try to stonewall attempts by borrowers’ attorneys to get them to verify loan status or apply eligible opportunities for borrowers.
“They just made stuff up,” said one frustrated borrower who stood up in the town hall to talk about the lender’s actions. “You can’t deal reasonably in a situation like that!”
This is just one example of the many ways the borrowers can find themselves stuck when lenders and loan servicers do not hold up their end of a good faith agreement.
In addition, in the state of Minnesota, we’re still going back and forth on whether the state will tax debt forgiveness amounts that may apply.
“There are people making minimum payments through the income based repayment plans who are going to get hit with an additional tax bill worth a couple of years of loan payments,” writes a concerned Redditor.
With all of this going on, keep reading the blog for more resources and firepower as a borrower. We are dedicated to helping students and former students to get what they deserve under the law! You can also check out resources like the Consumer Finance Protection Board, and, if necessary, look for legal representation. Don’t let lenders jerk you around!
