VSAC Student Loan Servicing Review

Who Is VSAC Student Loans?

VSAC is the Vermont Student Assistance Corporation. They were established in 1965 to provide support to higher education in Vermont. They were one of the original FFEL loan guarantors, and over the years have serviced Federal student loans in various ways. 

They also oversee the Vermont 529 Plan, as well as various scholarships and grants in the state.

VSAC stopped servicing Federal student loans, including FFEL loans, at different times throughout 2016 to 2023. They still issue the VSAC advantage private student loan, and service this loan in-house.

Where Did My VSAC Student Loans Migrate To?

If you have federally-held student loans that were serviced by VSAC, your loans have migrated to AES Loan Servicing. You can learn more about this move here.

Top Problems With VSAC Student Loans

Overall, borrowers who have had VSAC as their servicer haven’t been too unhappy — or at least not unhappy enough to flood the internet with complaints.

There was a relatively low volume of complaints publicly filed with the Consumer Financial Protection Bureau and Better Business Bureau. But the ones that are out there might hint at more general problems with VSAC loan servicing practices. Below we cover the top problems that borrowers have reported in regard to their VSAC student loans.

If you're not quite sure how to fix your VSAC student loan problems, consider hiring a CFA to help you with your student loans. We recommend The Student Loan Planner to help you put together a solid financial plan for your student loan debt. Check out The Student Loan Planner here.

1. Inconsistent Policies

When you’re dealing with a company, especially one that handles large amounts of money, you depend on them to be consistent and follow their own policies. When they don’t do that, it can be hard to trust them to handle your loans correctly.

One such policy is about deferment while the borrower is in school. For their private loans, VSAC gives the option to defer until after graduation, start making payments immediately, or make interest-only payments while in school. Instead, one borrower had to fill out deferment forms every 3 months on just one of their loans.

All others were in deferment and needed no maintenance until repayment would begin after graduation. This borrower worried that they would miss a payment if they forgot to fill out the paperwork or it didn’t get processed in a timely manner.

Another borrower experienced inconsistencies when changing their autopay account. For the first autopay change, VSAC put their account in forbearance until the next payment was due. The borrower did not approve the forbearance and pointed out that it would add more time to their loan repayment. The second time the borrowed tried to make a changed to autopay, VSAC used an old checking account, resulting in overdraft fees.

2. Uncooperative Billing Processes

Many student loan borrowers want to get rid of their loans as fast as possible — no one wants their loans looming overhead. Targeting specific loans is a great way to attack your student loans and pay off your balance quicker. To do this, you make extra payments and request that the servicer apply them to the loan of your choice.

But sometimes, a servicer does not apply them as requested. Though their website welcomes special instructions when sending in payments, one borrower was told that the VSAC policy is to apply extra payments toward the loan with the lowest interest. Though VSAC responded with belief that there was a misunderstanding, it’s alarming that the borrower could not work out an acceptable payment strategy with VSAC.

Another borrower had worked out an arrangement to pay their loans weekly instead of monthly and to put the extra payments toward the principal of the highest interest loan. After several months of this, the borrower was informed that they could no longer follow that payment schedule because of the “administrative burden” it placed on VSAC.

The VSAC rep also told the borrower that they must call in every month to get the extra payments applied as requested. Frustrated, the borrower complained that “by not being able to have weekly payments applied the way I have been, I believe they are preventing me from paying my loans faster.”

3. Misapplication Of Payments

When you make a payment, you generally expect your balance to decrease at a predictable rate. Unfortunately, that’s not always the case. After making monthly payments of $400–$500 for years, one borrower noticed that their balance was barely decreasing.

Suspecting that their loan was not being handled as promised, they reached out to VSAC. Requests for a copy of the promissory note were ignored or denied. Instead, the borrower kept getting billing statements that didn’t seem right. Exasperated, the borrower confessed, “A mortgage is cheaper than a student loan.”

Another borrower with a history of on-time monthly payments complained that their balance was increasing. Without the ability to pay more each month, their pleas for help were met with hostility: VSAC refused to help and instead threatened to garnish wages if the borrower stopped paying.

Another borrower was making payments to rehabilitate a defaulted loan. They got payments in when they could, sometimes early. One early payment wasn’t counted for the intended month; instead, it went toward the previous month. VSAC considered that a missed payment and deemed the rehab a failure, forcing the borrower back into collections to start the process over.

How To Contact VSAC Customer Service

You can reach out to VSAC customer service through the following:

Phone number: 800-642-3177

Hours of operation: 8-4:30 p.m Mon-Fri (ET)

General mailing address:

VSAC
PO Box 999
Winooski, VT 05404

Address for sending payments:

VSAC
PO Box 7501
Bennington, VT 05201-7501

Email/online contact form: info@vsac.org

What Else Can You Do If You Have Problems With Your VSAC Student Loans?

Final Thoughts

If VSAC is your servicer, you likely have private loans. The only way to lower private loan payments or transfer them to a different servicer is through refinancing.

Refinancing will get you a new loan with different terms and interest rate. Consider the pros and cons carefully before going through with a refinance. And do your homework to choose the best refi company to work with.

If you're not quite sure how to fix your VSAC problem, consider hiring a CFA to help you with your student loans. We recommend The Student Loan Planner to help you put together a solid financial plan for your student loan debt. Check out The Student Loan Planner here.