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Close Key Takeaways Student loan borrowers' complaints surged this year as required payments resumed and servicers struggled to implement numerous rule changes.Servicers gave borrowers incorrect information, delayed processing of important documents, and erroneously withdrew thousands of dollars from borrowers' bank accounts.Government watchdogs singled out Missouri-based MOHELA as making disproportionately more errors than other companies. The massive changes to the federal student loan system in 2024 provoked a massive surge of complaints from borrowers, many of them about the companies that administer the loans.That's according to a pair of government reports this week, which showed record numbers of complaints from borrowers, mostly about the companies that provide customer service and collect payments on behalf of the Department of Education. The Department of Education received 289,523 complaints in the fiscal year ending this September, more than double the 122,632 the year before, the agency's Federal Student Aid (FSA) ombudsman said in a report this week. Over the same period, the Consumer Financial Protection Bureau (CFPB) received a record 13,524 complaints about student loans, the bureau's own ombudsman said in a separate report.The reports highlighted how student loan servicers have struggled to implement the myriad of changes to the student loan system over the last year. Those included the resumption of required payments after the pandemic forbearance came to an end, the rollout of the SAVE repayment plan, which federal courts subsequently blocked, and many other rule changes. The reports also showed problems have persisted since the government punished student loan servicers for errors that affected borrowers in previous years.“Student borrowers continue to face lengthy delays and costly errors because of servicer failures,” CFPB Director Rohit Chopra said in a press release. So What Are All the Student Loan Complaints About? Borrowers were given incorrect adjustments to their accounts, told to make payments they didn't owe, had money unexpectedly drawn from their bank accounts, and had crucial paperwork delayed, the bureau said. Often, those errors had serious consequences for borrowers. Borrowers told the bureau they were late on rent or car payments, lost eligibility for mortgages, and were even forced to the brink of homelessness.For example, one borrower received a letter from MOHELA stating that their loan had been forgiven under the Public Service Loan Forgiveness program. The company later told the borrower the letter had been sent in error, and they still owed their entire balance of $26,000. The borrower had to change jobs to accommodate the financial burden, the bureau said.Another borrower told the FSA ombudsman they had made the 10 years of payments required by the PSLF to have their loans forgiven but that MOHELA was still sending them bills six months after he had submitted forms applying for forgiveness. "Why am I still getting billed? When will I be provided with a letter of forgiveness? I am 71 years old, way past retirement, I need to resign my job and move on with my life," the borrower said, quoted in the FSA report.In another example, a borrower said Maximus Federal Services pulled $6,897 from their bank account when they only owed $1,048. The company acknowledged the error and offered a refund a month later, the bureau said. What Do Student Loan Servicers and Advocates Have to Say? The department singled out MOHELA, a quasi-governmental company authorized by the state of Missouri, as being a major source of complaints. MOHELA services 18% of student loans on income-driven repayment plans, but 52% of borrower complaints involving income-driven repayment plans were about the company, the FSA ombudsman said.The Student Borrower Protection Center, an advocacy group, released a press release calling MOHELA'S errors "shocking."“This is more than just mismanagement; it’s a betrayal of the public trust," said Mike Pierce, SBPC's executive director, said in the release.A MOHELA spokesperson said the complaints were because of the unprecedented rule changes, including the return to repayment and changes to the PSLF."These events, in and of themselves, are likely to drive inquiries. We reject any characterization of wrongdoing on the part of MOHELA," the spokesperson said in an email. "MOHELA consistently collaborates with the Department to refine processes and improve service delivery for all borrowers.” Do you have a news tip for Investopedia reporters? Please email us at [email protected]