The Education Department has received 78 complaints since last October from student-loan borrowers who say their efforts to consolidate their loans, and save money in the process, have been stymied by lenders who are reluctant to lose their lucrative business, The New York Times reported today.
The lenders have dragged out the loan-consolidation process, to hang onto the borrowers and to continue collecting the higher interest rate that a change in federal law permitted as of July 1, the complaints say. The onset of the higher rate prompted an avalanche of borrowers to consolidate, and aggressive moves by lenders to sign them up (The Chronicle, June 23), so some lenders could conceivably still be dealing with a backlog of paperwork. But it’s impossible to tell whether that excuse is plausible.
