President Trump’s executive order to abolish the Department of Education has raised significant concerns about the future of student loans and their management
The Department of Education currently oversees federal student loans for nearly 43 million Americans
If the Department of Education is abolished, President Trump has suggested that the management of federal student loans could be transferred to several different agencies, including the Treasury Department, Commerce Department, or the Small Business Administration (SBA)
The Treasury Department is considered the most logical choice due to its existing role in collecting past-due debts through the Treasury Offset Program
This transition could involve significant changes in how student loans are administered, but the exact details would depend on the final decisions made by the government.
During this transition, there could be disruptions in loan processing, repayment plans, and administrative functions
However, the reporting of student loans on credit reports is unlikely to change significantly. The credit reporting process is managed by credit bureaus, which receive information from loan servicers. As long as loan servicers continue to operate and report data, student loans should still appear on credit reports as usual
The main concern for borrowers is potential delays and errors in loan servicing, which could impact repayment schedules and loan forgiveness programs
It’s important to stay informed and monitor any updates from the government regarding these changes.
If borrowers experience negative credit reporting due to delays with loan servicers, they have several options to address the issue:
- Dispute the Errors: Borrowers can dispute inaccuracies directly with the credit bureaus (Experian, Equifax, and TransUnion) and the loan servicer. The credit bureaus are required to investigate disputes and correct any errors within 30 days. Click this link for FREE credit disputing.
- Contact the Loan Servicer: Borrowers should reach out to their loan servicer to explain the situation and request a correction. Keeping detailed records of all communications can be helpful.
- File a Complaint: If the issue is not resolved and this department not abolished, borrowers can file a complaint with the Consumer Financial Protection Bureau (CFPB). The CFPB will forward the complaint to the company and work to get a response
- Monitor Credit Reports: Regularly checking credit reports can help borrowers spot errors early and take action promptly. Borrowers are entitled to free credit reports from each of the three major credit bureaus once a year through AnnualCreditReport.com
- Seek Legal Advice: In cases where disputes are not resolved satisfactorily, borrowers may consider seeking legal advice to explore further options.
It’s important to act quickly to minimize the impact on your credit score.
The best way to monitor your credit is with a credit monitoring service. We have found Credit Armor to be one of the best in the industry. If you feel items are reporting incorrectly or illegally on you credit report, reach out to us so we can give you a detailed consultation.
