Student-loan servicers' glitches trigger false delinquencies and credit hits

The student-loan repayment reform announced by President Donald Trump began on July 1, and soon after, borrowers reported a wave of technical errors from servicers. Daniela Perez received multiple emails indicating her account was over 210 days delinquent and nearing default, despite being current, and had to wait until Monday to speak with MOHELA, which eventually restored her forbearance status without harming her credit.

Rebecca Pasillas was similarly misinformed, receiving a notice that she was four months behind, which led to a nearly 200-point credit-score decline before she filed a dispute. Other borrowers, like Carly Marsh, were told they qualified for low monthly payments that were later withdrawn, forcing them back onto higher plans. A GAO report attributes the glitches to poor coordination and unclear guidance between servicers and the Education Department, which has pledged to monitor and correct errors and to alert borrowers. The ongoing miscommunications are straining borrowers’ finances and causing anxiety about loan forgiveness eligibility.