'A bunch of red tape': Student-loan borrowers can't get clear answers from the companies that manage their debt

• Student-loan borrowers said they're facing challenges getting clear information from their servicers.
• Some have faced long hold times, while others received conflicting payment information.
• The Education Department said it closely monitors servicer performance.

Jessica Salmi waited nearly an hour on hold before her call was disconnected. Jason Marques' servicer can't say if his next student-loan payment will be $100 or $633. Robin Binkley is struggling to find out which repayment plan she qualifies for.

As millions of borrowers navigate President Donald Trump's sweeping student-loan repayment overhaul, which took effect on July 1, dozens have told Business Insider they're struggling to get clear answers from the companies that service their loans. They described long hold times, disconnected calls, and conflicting or incorrect information.

Ellen Keast, the department's higher education press secretary, said that internal data show hold times and dropped-call rates have remained consistent, and that the department "remains focused on ensuring student loan borrowers receive the highest-quality customer service." She added that Federal Student Aid leadership "regularly meets with servicers" to review customer satisfaction surveys and performance.

Borrowers told Business Insider the problems extend beyond getting someone on the phone. Several said they were transferred between representatives, received conflicting guidance, or couldn't get relevant answers. The confusion impedes their ability to budget for the future, whether it means putting money into retirement or affording the next grocery bill.

Binkley, 38, said she recently filed a complaint with Federal Student Aid after spending "countless hours" over the past few months trying to understand her repayment options through phone calls and online chats with her servicer.

"This is a decision that could affect my finances for many years, and I cannot understand why borrowers are expected to make these choices without accurate information or meaningful guidance," Binkley said.

Since she also has to budget for a loan she took out for her daughter's education, Binkley said she wants to ensure she receives the most affordable repayment option, and she's been unable to get that information from her servicer.

"Right now, it feels as though borrowers are being left to navigate one of the most important financial decisions of their lives without anyone willing or able to provide the answers we need," Binkley said.

This is the latest installment in Business Insider's "student debt spiral" series, which explores how rising student debt is changing the financial futures of millions. Do you have a story to share? Fill out this form, and we'll be in touch. Read more of our student-loan coverage here:

• Trump's student-loan repayment overhaul has arrived — with borrowers facing new limits and higher bills
• Student-loan borrowers are pushing off retirement, delaying children, and taking on 3 jobs to prep for repayment changes
• Student-loan borrowers were mistakenly told their monthly payments were $50. Some of their bills are much higher.

Navigating student-loan repayment confusion

Marques, 39, described working with his student-loan servicer as "a bunch of red tape."

Marques applied for an income-based repayment plan that was projected to give him monthly payments of less than $100. He was shocked when his first bill was $633.

After reaching out to his servicer, Nelnet, about the unanticipated higher payment, Marques was placed in temporary forbearance. However, he said the first $633 payment is still due on his account, and he cannot afford it while balancing his other monthly expenses on a five-figure income.

"Obviously, I want to pay my student loans back, but just the sticker shock of seeing a $633 bill is eye-watering to say the least," Marques said. While Marques said the customer service representatives he's spoken to have been "knowledgeable," he is frustrated that he has to take it upon himself to call and get answers, rather than receive proactive communication from the servicer.

Sarah Smith, 35, said she made a payment to her servicer, MOHELA, but that it wasn't reflected on their website. She said when she called to confirm that the payment had been processed, a representative told her she wasn't a MOHELA client anymore.

Smith was also affected by Trump's elimination of the Biden-era SAVE plan, which allowed for cheaper payments. She said not knowing what she'll owe under a different repayment plan is making it even more difficult to plan financially.

"I can't keep changing my life around to try and predict what these payments will be," Smith said. "The amount you owe changes so much that you really can't make good financial decisions."

Oversight over student-loan servicers

Problems with federal student-loan servicers predate the current repayment changes.

Under the Biden administration, the Education Department penalized servicers for failing to meet contractual obligations, such as providing accurate information to borrowers. In October 2024, the Department withheld $7.2 million from servicer MOHELA for failing to send borrowers timely billing statements, and later fined the remaining federal servicers over similar issues.

Under the Trump administration, servicer oversight has been reduced. In April 2025, the Consumer Financial Protection Bureau directed staff in an internal memo to "deprioritize" oversight of student-loan servicers. The Government Accountability Office found in a March report that the Federal Student Aid office stopped assessing servicers' call quality and billing accuracy in February 2025 due to staffing cuts at the Education Department.

Four of the five federal servicers did not meet their obligations and faced $850,000 in penalties prior to the staffing cuts, the GAO said.

Trump's July 1 repayment overhaul, which included new borrowing caps and the transition of millions of borrowers to new repayment plans, is a significant undertaking for servicers. Payment glitches have already sparked confusion — Business Insider reported that some borrowers received $50 payment estimates despite their actual payments being higher, sparking confusion and frustration for the borrowers who budgeted for the lower payment.

After spending nearly an hour on hold only to have the call disconnected, Jessica Salmi, 38, doesn't bother calling her servicer anymore.

"Getting them on the phone to actually talk to a human being is next to impossible," Salmi said. "You could die waiting."

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