Problem Of Plenty For Banks & Lenders
This seems to be snowballing into a major controversy. I really don’t know what to make of it. I mean it could be true that the big lenders are really bogged down and cannot speed up the process so that students can switch financial institutions. Tens of thousands of undergraduate and graduate students DID rush to consolidate their federal student loans this spring and summer, trying to lock in lower interest payments before higher rates took effect on July 1.
I mean just the sheer numbers could’ve been enough to crash their workforce, methinks! But frustrated students think otherwise, and so do executives at some of the companies that process the applications. They are accusing big lenders like Wells Fargo, Wachovia and even Sallie Mae of violating federal regulations and slowing the process, charging the higher rates in the meantime. One such company even complained to the Education Department, which is now looking into the issue. Tech-mit.edu reports:
Banks and other lenders say that if there are lags in processing applications, they are the result of the sheer number of students who have applied to consolidate their loans; one consolidation company received 40,000 applications in June alone. There is no central database that tracks the pace of consolidation activity.
Read more: Sluggish Service Claim After Rush For Loan Consolidation
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