Citibank was one of the leading student loan providers in the United States, with student financing over millions of college fees until 2010. What happened in 2010? In 2010 Citibank sold off all the student loans that they had, and seven years later, they completely stopped servicing any loans whatsoever. If you had a student loan from this institution, you might wonder how you can get rid of Citibank student loan forgiveness and what happened to your loan debt as a result of the collapse in 2017. Students are left clueless after Citibank sold the loans to other corporations post-2010. This article aims to outline what happened to Citibank student loans and how you can refinance/recover your student loan balance.
About Citibank
Citibank is an institution with over 200 years of experience in banking. It was founded in 1812. Their services include providing customers with financial assistance, resources, tools, student loans, cards, and more. The company is the subsidiary of Citigroup. The interest area of Citibank is the consumer division of the business. Citibank has more than 2000 branches in over 19 countries. For instance, the service in Mexico, the United States, Poland, Russia, India, and the headquarters of the company is based in New York State.
What happened to the student loans from Citibank?
In 2010, Citibank started to sell student loan debts that they own to third party organizations. The buying partners included first mark Services, Discover, Department of Education, and Sallie Mae. Until 2017, all the Citibank student loans that were not sold to these companies, issued by the company itself. In 2017 the company decided to shut down all the services regarding the loans. Why have they done that? Consumer Financial Protection Bureau (CFPB) started to investigate the Citibank loansin 2017 by stating that the company is mishandling the process.
If you have a student loan from Citibank, this is good news for you because CFPB decided that students who enrolled in the universities by taking Citibank loans from 2006 to 2015 should get paid from $47 to $250 for each one. Citibank should allocate at least $3.7 million for paying back the harmed students. The standard argument in the case was that Citibank did not let students take full advantage of the loan and practiced illegal steps to make them victims. If you have not got a refund from the Citibank student loan forgiveness program, it is a high time for you to call them directly and ask for more information.
How did Citibank cause harm to students?
Citibank was accused by CFPB early in 2017 on many matters regarding the student loans. CFPB wanted to make sure that Citibank will repay all the students who got involved in these acts and were victims of their practices. Besides that, they wanted to clearly state that these practices are unacceptable and should never happen again. Although Citibank only serviced the private loans, the lawsuit by CFPB was the ultimate warning against all the student loan servicers doing or intending to do practices like that. There are several matters that Citibank was accused of doing, and in the following paragraphs, we are going to discuss them one by one. So, let’s start with the first one, which is about misleading students.
Citibank mislead students about Tax Deductions
Citibank misinformed student loan borrowers about the annual tax deduction throughout the process. The tax deduction is a program that serves people and helps them to diminish the tax burden by $2500. As you may already know, the interest rates for Citibank student loans were high, and this tax deduction was a very pleasing offer for students not to accept it.
Citibank misinformed students about the tax deduction and then came up with a statement that most of that student would not be eligible for this program because they missed paying the interest rate on time. As students saw this message by Citibank, they lost any hopes for the tax deduction program. As a result, most of them did not apply to get this opportunity. Those students who did not apply for the Student loan interest tax deduction program because of the misinformation by Citibank were the victims, and Citibank should give them a partial refund during the repayment process.
Charging Late Fees for students who are Still Studying
If you think that the first practice regarding the tax deduction was terrible, then you would be shocked about this one because Citibank began charging students who were still enrolled in their classes for late payment. As we already know, the whole point of Citibank student loans is to pay them back after graduation and when students have a stable salary or can take care of themselves. These programs are for helping students who need it desperately, and they do not have the right to ask those students to pay the money back up until they would be eligible to do so. The timeframe is about six months after their graduation.
Citibank tried to get them in school deferments from students though they did not inform any student about their intention. They suddenly started to attack them by asking them to payback. During the process, Citibank began to cancel deferments and charging fees on late payments. It was disgusting to see, and the students were totally in shock after facing this treatment from their loan servicer. If that was not enough, the institution did not stop there. Besides these illegal practices, the bank decided to increase the interest rates on loans.
Overstatement of Minimum Annual Payments
In the student loan accounts, the monthly reports are being reported annually. The next fraudulent act by Citibank was in regard to these reports. Citibank sent an email and updated the account sheet with the wrong number for several months. Students who did not know about the case found themselves in a situation where they paid higher amounts annually to the institution. Fortunately, the CFPB found out about these activities before it was too late and charged the company for their fraudulent acts towards student loan borrowers.
What to do next if you have Citibank Student Loans?
There are thousands, if not millions of students who have student loans from Citibank. Those students do not know where the student loans transferred because Citibank sold the loans starting from 2010 to other companies. It is not difficult to find out the place of your student loan. Why? Most of the loans that Citibank sold during that period are purchased by entities like:
- Sallie Mae
- Department of Education
- Firstmark Services
- Discover
The ownership of the loan switched without any information to the borrower, so it’s impossible to know which company owns your student loan? Generally, when there is a switch regarding student loan ownership, the company sends an email to notify the borrower. Let’s say that you did not get an email; how can you get information? It is also a good idea to check the official website of the National Student Loan Data System. That database has all the details about federal student loans, whether they are from Citibank or any other loan servicer.
If you want to better manage your cash, receive daily financial tips and improve your financial literacy, check out Money Visual’s articles.
National Student Loan Data System
Every student loan borrower has a different FSA ID. By logging in to the system with that ID, you can get the required information. For those students who did not get an FSA ID, they can easily make it by themselves through registering to the Federal Student Aid website. With that ID, you need to visit the National Student Loan Data System website. After that, you should click on the Financial Aid Review. On that page, you will see a page with all the data that you need regarding the Citibank Student loans, such as:
- the owner of your loan
- servicer
- lender
- guarantor, and more.
It is also possible to connect with your student loan provider through this website. You can write to them about the process, your plans about repaying the loan, and other such aspects.
If you cannot find any information after logging in to the system, do not worry. That means that your student loan is serviced by a private organization as NSLDS only shows lenders from the federal government. It is a more complex issue when your loans are owned by private lenders. The best way to resolve issues with private lenders is to check your bank statement. It can be helpful for you to see which private lender has your Citibank student loans. Bank statements that come to student accounts include:
- the term payment amount
- overall debt amount
- and also the loan servicer that owns the loan.
Checking Credit Report
If you cannot find the exact information from bank statements, there is another way that you can utilize it. By checking the credit report, it is also possible to find the owner of the Citibank student loans. Every student has the chance to get free credit reports three times a year. In order to get them, you need to file an application through the Annual Credit Report website. What can you expect to find in these reports? The annual credit report is a collection of reports regarding:
- the debt amount
- the servicer
- loan lender
- any type of statistics regarding these matters.
With the right information on hand, you can contact the student loan lender and discuss the plans moving forward.
Stay on Top of Your Student Loans
Whether the student has a student loan from Citibank Corporation or any other lender, they need to be aware of the payment schedule and other related information pertaining to their loan. Some students change their loan servicers while others get switched from one lender to another. In all cases, students should be attentive about their account and check it regularly, not to miss any deadline. In that case, even if you apply for the Citibank student loan forgiveness program, you need to pay your loans on the deadline date. If you get acceptance from the program, then it’s great news for you.
Keep in mind that you are entitled to pay those loans before the official release regarding the results of loan forgiveness. Most of the transactions may seem meaningless for the application process. Your credit score is significant for you to get approval for credit. To get a higher credit score, you need to pay your loans on time. If you have a higher credit score, then it reflects on your application. Therefore, the possibilities of you getting the Citibank student loan forgiveness is stronger. It is the key to success when it comes to student loans. So, learn how to be on top of your Citibank student loans for getting yourself out of this mess.
Citibank mislead students about Tax Deductions
Citibank misinformed student loan borrowers about the annual tax deduction throughout the process. The tax deduction is a program that serves people and helps them to diminish the tax burden by $2500. As you may already know, the interest rates for Citibank student loans were high, and this tax deduction was a very pleasing offer for students not to accept it.
Citibank misinformed students about the tax deduction and then came up with a statement that most of that student would not be eligible for this program because they missed paying the interest rate on time. As students saw this message by Citibank, they lost any hopes for the tax deduction program. As a result, most of them did not apply to get this opportunity. Those students who did not apply for the Student loan interest tax deduction program because of the misinformation by Citibank were the victims, and Citibank should give them a partial refund during the repayment process.
Charging Late Fees for students who are Still Studying
If you think that the first practice regarding the tax deduction was terrible, then you would be shocked about this one because Citibank began charging students who were still enrolled in their classes for late payment. As we already know, the whole point of Citibank student loans is to pay them back after graduation and when students have a stable salary or can take care of themselves. These programs are for helping students who need it desperately, and they do not have the right to ask those students to pay the money back up until they would be eligible to do so. The timeframe is about six months after their graduation.
Citibank tried to get them in school deferments from students though they did not inform any student about their intention. They suddenly started to attack them by asking them to payback. During the process, Citibank began to cancel deferments and charging fees on late payments. It was disgusting to see, and the students were totally in shock after facing this treatment from their loan servicer. If that was not enough, the institution did not stop there. Besides these illegal practices, the bank decided to increase the interest rates on loans.
Overstatement of Minimum Annual Payments
In the student loan accounts, the monthly reports are being reported annually. The next fraudulent act by Citibank was in regard to these reports. Citibank sent an email and updated the account sheet with the wrong number for several months. Students who did not know about the case found themselves in a situation where they paid higher amounts annually to the institution. Fortunately, the CFPB found out about these activities before it was too late and charged the company for their fraudulent acts towards student loan borrowers.
What to do next if you have Citibank Student Loans?
There are thousands, if not millions of students who have student loans from Citibank. Those students do not know where the student loans transferred because Citibank sold the loans starting from 2010 to other companies. It is not difficult to find out the place of your student loan. Why? Most of the loans that Citibank sold during that period are purchased by entities like:
- Sallie Mae
- Department of Education
- Firstmark Services
- Discover
The ownership of the loan switched without any information to the borrower, so it’s impossible to know which company owns your student loan? Generally, when there is a switch regarding student loan ownership, the company sends an email to notify the borrower. Let’s say that you did not get an email; how can you get information? It is also a good idea to check the official website of the National Student Loan Data System. That database has all the details about federal student loans, whether they are from Citibank or any other loan servicer.
If you want to better manage your cash, receive daily financial tips and improve your financial literacy, check out Money Visual’s articles.
National Student Loan Data System
Every student loan borrower has a different FSA ID. By logging in to the system with that ID, you can get the required information. For those students who did not get an FSA ID, they can easily make it by themselves through registering to the Federal Student Aid website. With that ID, you need to visit the National Student Loan Data System website. After that, you should click on the Financial Aid Review. On that page, you will see a page with all the data that you need regarding the Citibank Student loans, such as:
- the owner of your loan
- servicer
- lender
- guarantor, and more.
It is also possible to connect with your student loan provider through this website. You can write to them about the process, your plans about repaying the loan, and other such aspects.
If you cannot find any information after logging in to the system, do not worry. That means that your student loan is serviced by a private organization as NSLDS only shows lenders from the federal government. It is a more complex issue when your loans are owned by private lenders. The best way to resolve issues with private lenders is to check your bank statement. It can be helpful for you to see which private lender has your Citibank student loans. Bank statements that come to student accounts include:
- the term payment amount
- overall debt amount
- and also the loan servicer that owns the loan.
Checking Credit Report
If you cannot find the exact information from bank statements, there is another way that you can utilize it. By checking the credit report, it is also possible to find the owner of the Citibank student loans. Every student has the chance to get free credit reports three times a year. In order to get them, you need to file an application through the Annual Credit Report website. What can you expect to find in these reports? The annual credit report is a collection of reports regarding:
- the debt amount
- the servicer
- loan lender
- any type of statistics regarding these matters.
With the right information on hand, you can contact the student loan lender and discuss the plans moving forward.
Stay on Top of Your Student Loans
Whether the student has a student loan from Citibank Corporation or any other lender, they need to be aware of the payment schedule and other related information pertaining to their loan. Some students change their loan servicers while others get switched from one lender to another. In all cases, students should be attentive about their account and check it regularly, not to miss any deadline. In that case, even if you apply for the Citibank student loan forgiveness program, you need to pay your loans on the deadline date. If you get acceptance from the program, then it’s great news for you.
Keep in mind that you are entitled to pay those loans before the official release regarding the results of loan forgiveness. Most of the transactions may seem meaningless for the application process. Your credit score is significant for you to get approval for credit. To get a higher credit score, you need to pay your loans on time. If you have a higher credit score, then it reflects on your application. Therefore, the possibilities of you getting the Citibank student loan forgiveness is stronger. It is the key to success when it comes to student loans. So, learn how to be on top of your Citibank student loans for getting yourself out of this mess.
