Ombudsmen: Advocates for a Fair Student Loan Process

The NCHELP (National Council of Higher Education Loan Programs) Student Loan Ombudsman Caucus Meeting was held this month in Boston, immediately following the ASA Annual Symposium. It provides a good opportunity to draw attention to the value of these hardworking student advocates.

In a perfect world, the student loan process would not need ombudsmen. Lenders, servicers, ED, and borrowers would work in harmony to lend and repay student loan funds like clockwork. And yet every year, thousands of borrowers turn to ombudsmen for help in settling disputes involving their student loans.

When unique or complex conflicts arise in the repayment process, ombudsmen intervene to create solutions among the parties involved. For instance, ombudsmen may facilitate resolution for borrowers with disabilities by helping them to arrange long-term payment agreements or waivers with the borrowers’ lenders or servicers. They may assist borrowers in achieving loan payment relief when significant life events change their economic circumstances—such as job losses or health problems.

Certainly, the current economic uncertainty will create many more opportunities for ombudsmen to aid borrowers. And their work will not only be important to protecting the government’s investment in the student loan program but also to ensuring that student loan borrowers receive exemplary customer service even in extraordinary circumstances.

But while ombudsmen deal with the minutiae of a thousand individual loan cases, they also play another role—they serve as a “canary in the coal mine” for the student loan industry as a whole. Their exposure to a large cross-section of student borrowers allows them to identify trends and diagnose recurring problems in the structure of our student loan programs. Ombudsmen possess an intimate knowledge of the entire loan system, and their birds-eye view makes them ideally positioned to create practical solutions that address students’ issues on a program-wide scale.

Equally as important, ombudsmen often act as the keeper of borrowers’ stories for their organizations. They remind us all of the human impact created by student loan policies and procedures—and of how our actions can make a difference in the lives of real people.

The feedback ombudsmen offer is vital to the health of our nation’s student loan programs and their ability to serve families’ best interests. After all, the industry can be confusing even to insiders who eat, sleep, and breathe loans—imagine how daunting it must seem to the students and families for whom loans are just one stepping stone on the path toward their dreams.

Posted by Shelley Saunders on June 23, 2008 at 01:30 PM EST

post a comment | view 2 comments