Inside the 'vicious cycle' of spiralling student-loan debt caused by servicers just not picking up the phone

• Some student-loan borrowers told Insider they are struggling to get help from their loan servicers.
• Even though some qualify for debt relief, they accumulate more debt instead.
• Lawmakers have been pushing to hold the servicers accountable, but further reform is pending.

Charles Moore, 49, was on the phone for four hours with the company that collects his student loans.

Moore, who holds more than $50,000 in student debt, wanted to know why his and his wife's loans weren't consolidated, or combined, and despite many attempts to contact American Education Services, which collects his loan payments, he wasn't able to get an answer. This means they were paying two debt loads' worth of interest when they could have just been paying for one.

"Nobody wants to assist you," Moore, of South Carolina, told Insider. "And you don't know how to get help. Even though you go back and forth, the lender doesn't know what the servicer is doing and the servicer doesn't know what the lender is doing."

Student-loan servicers have been under close scrutiny on Capitol Hill over the past decade for practices that have put borrowers in a bind, engaging in misleading practices, with many borrowers taking out loans they can never pay back, among other things.

Moore's loans, along with 8.5 million others, are owned by the Pennsylvania Higher Education Assistance Agency (PHEAA), which just announced it is shutting down its loan services in December. Massachusetts Sen. Elizabeth Warren said those borrowers can now "breathe a sigh of relief" knowing their loans won't be managed by a company that "has robbed untold numbers of public servants of debt relief."

Borrowers told Insider that their debt piles continue to grow, simply because they can't reach their servicers for help. Here's what those borrowers are dealing with, and how lawmakers want to hold servicers accountable.

'It's a really frustrating process' to try to reach servicers

Both Moore and Lynda Costa, a 56-year-old borrower, qualify for relief under various programs, but they told Insider that they've been effectively denied because their servicers just aren't responsive.

To qualify for lower monthly payments on his student loans, Moore first sent in paperwork in 2007 for his income-driven repayment plan. He said he never heard back from his servicer on the paperwork he submitted, and his monthly payments continued to increase, even though he went through periods of unemployment.

"I never got a denial letter, never got a response on why I was denied, nothing," Moore said. "It's a really frustrating process. I had to submit paperwork over and over and over again. And eventually, we got to the point that we were getting behind on our payments."

Costa told Insider she has been chipping away at what is now a $41,000 debt load since 2005, even though, as a nonprofit worker, she qualifies for the Public Service Loan Forgiveness (PSLF) program.

She said that for years she has been trying to find out why she doesn't qualify, to no avail.

"It's a vicious cycle," Costa said. "Every year I got no relief, and it never really sounded like anyone at the servicer was really working with you."

Costa even sent a letter of complaint to Navient, the company that held her loans, detailing its "lack of attention" to her difficulties in making payments and failure to provide options for debt relief, and she did not recall ever receiving a response.

"It's just very discouraging," she said. "I feel I've been paying off the $41,000 for years now, and it just never seems to go away."

Lawmakers are cracking down on servicers - or trying to

Warren has stressed the need to reform unfair student lending practices for years. In April, Warren and John Kennedy, ranking member of the Senate economic policy subcommittee, invited the CEOs of all student-loan servicers to testify. That's when Warren told the CEO of Navient that he should be fired for misleading borrowers.

Navient supports student loan borrowers "by helping them navigate a complex federal student loan program," a spokesperson told Insider, adding that more than half of Navient-serviced federal student loans are enrolled in an income-based repayment program.

The spokesperson added that Navient offers many "easy-to-use" tools and information, and the company can be contacted easily by phone, email, or online.

PHEAA's CEO James Steeley also testified during the April hearing, but last month, Warren and Kennedy sent a letter to Steeley regarding "what appear to be false and misleading" statements from his testimony.

After shutting down its loan servicing, PHEAA's director of media relations, Keith New, said in a statement that in the 12 years since the company accepted its federal loan servicing contract, the programs "have grown increasingly complex and challenging while the cost to service those programs increased dramatically."

In the meantime, Costa said, "If you're not knowledgeable, and you're not listening and paying attention to what's out there, and you're not continuously calling your servicer and bothering them, there's just no way to pay off your loans. It seems impossible."