Collector - August 2018 - 10
Student loans are complicated and consumers have lots of questions
about their debt. Here's how an on-staff ombudsman can help.
By Anne Rosso May
ore than 40 million Americans
have student loan debt, and yet
the inner-workings of the student
loan world remain by and large a mystery
to most U.S. consumers. Survey after survey
shows that borrowers are confused by loan
fees, interest accrual, repayment plans and
much, much more.
This confusion not only contributes to
borrowers making ill-informed decisions
about their student loans, it also leads
them to lodge complaints with the U.S.
Department of Education, student loan
servicers, guarantors, higher education
institutions and third-party debt collection
agencies, just to name a few.
Enter: the ombudsman.
It's a term that originated in Sweden,
which created the first governmental
ombudsman position more than 200
years ago, and it roughly translates to
"representative." In the student loan world,
ombudsmen review borrowers' complaints
and disputes: answering questions,
clarifying processes and correcting errors
The federal government has two
ombudsmen offices that field consumer
complaints about student loans: the
Department of Education's Federal Student
Aid Ombudsman Group and the Bureau of
Consumer Financial Protection's Student
Many servicers and federal student
loan guarantors, like Educational Credit
Management Corporation and Trellis
Company, have ombudsmen on staff, but
third-party debt collection agencies can
have ombudsmen too. In fact, you may
have someone serving in this role right
now who operates under a different title,
like customer experience director or chief
Here, we look at why ombudsmen are
so essential for companies working with
student loan accounts and how you can
create an atmosphere that fosters impartial
consumer complaint resolution.
WHAT IS AN OMBUDSMAN?
Williams and Fudge Inc., a third-party
debt collection agency specializing in
student loans, created its ombudsman
position in 2013 to proactively respond
to consumer issues. Chief Compliance
Officer/Ombudsman Bob Duenkel,
CCCO, investigates and responds to all
complaints-those received directly from
borrowers as well as those filtered through
regulators and other entities, like the Better
"Sometimes that might be an instant
response because I can determine by
speaking with the individual the reason for
the complaint, or sometimes it might take
investigation and looking at documents and
correspondence between the agency and
consumer to determine the root cause of the
issue," he said.
While the ombudsman title may not have
the same brand recognition as other roles
in your organization, like, say, "collection
manager," being able to communicate to
consumers that there is a specific individual
whose sole focus is to help resolve consumer
issues is extremely important.
"I don't know if it's the title as much
as what you do," said Diane Zitur-Hagel,
ombudsman for ECMC. "Most people ask
me, 'What is that?' when I tell them I'm an
ombudsman. I explain to them that I'm an
advocate for fair process. It's different from
being a borrower advocate and it's different
from being an ECMC advocate. I'm neutral,
I'm impartial and most importantly, I'm
going to listen to you."
POSITIONED FOR SUCCESS
This neutrality can be difficult-but
not impossible-to achieve when the
ombudsman is on a company's payroll.
To preserve your ombudsman's
independence as best you can, think
carefully about where to put the position
on your org chart. Most ombudsmen report
directly to executive management to avoid
being influenced by other departments.
"As the ombudsman it's my responsibility
to remain neutral, and if I am reporting to
operations, there would be prejudice and
bias toward operations," Duenkel said.
John Seibert, the ombudsman for Trellis
Company, agreed. "I'm not looked at to
get our collection numbers up," he noted.
"My responsibility is solely to work toward
solutions for individuals and help them
This impartial attitude needs to start
with your executive management and
should travel down the company hierarchy.
Ombudsmen are constantly digging
into issues, pulling notes and reviewing
policies, and often require information
from various areas of the company to
answer consumers' questions.
"When I'm doing my research on an
account, I may need information from six