The Department of Education — and some of the private collection agencies it uses to collect on unpaid student loans — are understaffed and that is causing a customer service problem for individuals who are seeking information about why their tax refunds are being withheld to cover unpaid debts, according to a published report.
The report details one woman’s attempt to reach a customer service representative at the Education Dept. Calls to the department kept dropping, automated attendants said the wait times to be connected to an operator were 50 minutes or longer, and it took days before she was able to get someone on the phone. Other borrowers have complained about having to wait “for hours” on the phone before being connected to a representative.
“In eight years of representing borrowers and dealing with the Education Department, I have never seen this before,” said Adam Minsky, a student loan lawyer in Boston, in the report. “I have never seen such a widespread, long-running, systematic breakdown of the Education Department’s default servicing system.”
The issue is security clearances, which is taking longer than it has in the past because of an audit report that revealed contractors were working for the division of the Education Dept. that handles student loan collections before their clearances were approved. The department added “more layers” to the screening process to make up for the error, but chose to do so during tax refund season. And, as any collection agency will tell you, that’s the worst time to be understaffed.
The delays in getting representatives on the phone after a tax refund has been withheld is leading some individuals — who were counting on their refunds to make ends meet — to face eviction or other dire financial situations, according to the report.
