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When you’re in college, it’s easy to think that your whole life is ahead of you, and that it will all work out. But when you graduate, the only thing that’s guaranteed is that your student loans are going to be really high.

That’s why it’s important to know what your options are if you can’t afford your student loans.

What Are Student Loans?

Student loans are a way for students to pay for school by borrowing money from banks and other lenders. These loans typically have fixed interest rates, which makes them easier to budget than other types of loans like credit cards or personal loans. They also have longer repayment terms, which gives borrowers more time to repay them without having to worry about paying interest on top of interest.

How Do I Get a Student Loan?

Student loans can be applied for through the U.S. Department of Education and other organizations such as private lenders or banks. Each type of lender has different requirements for borrowers—for example, some might require a co-signer while others don’t care whether you have one or not—so make sure you understand what those requirements are before applying for any type of loan!

Yes, you can dispute your student loan payment history and status. The federal government has steps you can take to dispute certain issues with your student loan account. 

For instance, you can dispute the following student loan errors:

• Incorrect account balance on your student loan
• Loan incorrectly reported as in default
• Identity theft, fraud, or error
• Incorrect facts used to deny a student loan discharge
• Tax and wage garnishment errors

To dispute your student loan account history, you must contact your student loan holder and provide proof of the errors you’re claiming. The federal student aid website has more information on how to dispute your federal student loan. If you have a private student loan, you’ll have to call your loan holder or loan servicing agency to dispute any errors related to your account.

loan dispute meaning

What are disputes and how does the process work?

A dispute occurs when a cardholder contacts their card issuing bank and demands to have their money returned. Disputes are a feature of the Visa, Mastercard and American Express card networks intended to protect cardholders from fraudulent activity.

Disputes may arise for a number of reasons including:

• Not as described, where the cardholder claims to have never received the goods, or the goods were materially different from their expectations.
• Not recognised, where the cardholder has no recollection of what a charge in their bank statement relates to.
• Fraud, where the cardholder claims they did not authorise the purchase (e.g. their card information was stolen and used fraudulently).
• Admin error, such as duplicate billing, incorrect amount billed or a refund which was promised but never received.

This guide is intended to provide an overview of the dispute process and help you understand the risks of transacting online.

Card-Not-Present Risks

The conditions outlined by the card companies is clear in that their trading rules request that a ‘PIN number’ or ‘signature’ be obtained during a transaction. In the case of Card Not Present transactions, for example transactions made over the internet, the merchant carries a higher level of dispute risk as they may be unable to provide such evidence to show that the ‘true’ cardholder authorised or participated in the transaction.

While Pin Payments and the banks have fraud detection systems in place, these will not always be able to catch cases where stolen cards are used to purchase goods on your website. While it’s less than ideal, this is an unavoidable risk of transacting online that you need to be aware of.

Understanding the risks associated with what you sell

Certain products/services (such as online data storage) show a higher incidence of dispute risk as they attract individuals who wish to use these services for nefarious means. It is important to understand the products and services you are offering and their respective appeal to fraudulent individuals.

While some controls can be instituted for physical goods (outlined below), the sales growth in digital products on a global scale, makes it more challenging to understand exactly who you’re selling to. While it is a disappointing reality, depending on the products/services offered and the locations into which you’re selling, you may need to incorporate a premium into your pricing to cover dispute risk.

For more information on understanding the risks associated with what you sell, please read our blog post on the subject.

The Dispute Process

A dispute is initiated by the consumer’s issuing bank (the bank that supplied them their credit card) and the process is directed through Pin Payments’s acquiring bank. The notification of a dispute may be received via the following:

• A retrieval request which is generated when the cardholder has requested more details about the charge on their card. A retrieval request is purely a request for information and does not result in the immediate movement of funds. Should information provided by the merchant prove satisfactory to the cardholder, the case is closed. If however the cardholder is not satisfied with the details relating to the charge on their card, they may formally raise a dispute to recover the funds. When a dispute is formally raised, we notify the merchant so they can contest the dispute, and temporarily withhold the funds for the disputed charge plus a dispute admin fee of $25 AUD from the merchant’s settlement funds. Generally, where possible, your response should include all details relevant to the transaction and ideally details to verify the cardholder which may include:
  • a signed copy of the transaction receipt; and/or
  • a copy of the order or invoice; and/or
  • a copy of any correspondence received by you from the cardholder.
• A dispute where the cardholder disputes the charge on their card immediately and raises a dispute claim. Once a dispute notification is received, the merchant has 7 days to challenge the dispute claim. If the merchant does not dispute the claim within 7 days or the information sent is deemed unsatisfactory, the funds withheld from the merchant will be returned to the cardholder. If the dispute case awards in the favour of the merchant, no funds will be awarded to the cardholder, the funds withheld for the disputed charge will be released to the merchant’s settlement account, and the admin fee reversed to the merchant.
• The arbitration and settlement process is handled directly between the issuing and acquiring banks. Unfortunately Pin Payments is unable to influence the arbitration process other than supporting the merchant to present a sound case where the merchant believes the dispute claim is unfair or fraudulent. In all cases, once the banks have agreed an outcome, we must abide by the decision reached. There are no avenues for escalation.

Suggestions to Reduce Disputes

• Early Settlement — in some cases, the consumer may make contact with the merchant to clarify the charge on their card. We encourage open discussion with the consumer to try and reach an amicable settlement before a dispute transaction is processed. If a refund is issued to the consumer, please ensure they provide written evidence of their request to withdraw the dispute claim.
• Evidence — the banks will ideally wish to see signed evidence to show that the ‘true’ cardholder authorised or participated in the transaction, and/or the relevant authorisation was obtained. To guard against the unauthorised or fraudulent use of credit cards, we recommend appropriate due diligence processes to assess the consumer’s validity before shipping/releasing goods or services.

If shipping physical goods, it is appropriate to use shipping methods where a signature is required by the consumer to accept the physical goods. When shipping physical goods:

• Make sure a reputable courier engaged by you makes the delivery and use a courier that does not allow shipping re-routes.
• Ensure delivery is to a physical address. Never send deliveries to a hotel, motel or GPO Box.
• Ensure that the person making the delivery does in fact deliver the goods to a person inside the premises.
• Obtain a signature wherever possible on delivery.

In the case of card-not-present transactions, the following suggestions may help reduce the likelihood of disputes:

• Obtain the credit card number, name of the bank, expiry date, full name, address and contact phone numbers, including landline contacts.
• Conduct a telephone directory check on the details provided to verify name and telephone number.
• Confirm the order by calling the landline number provided and/or send confirmation of the order to the billing address, not the shipping address.
• Do not continue to attempt authorisation or split a transaction after receiving a decline.

For those who are having trouble paying their student loans, it’s important to know that there are options available to you.

If you’re struggling with your student loan payments, you may be able to qualify for a number of ways to help lower your monthly payment. This is different than disputing the validity of your debt.

You should also know that if you’ve been paying on time and suddenly find yourself unable to make a payment, or if you feel like the amount that is being taken out of your paycheck isn’t correct, there are steps you can take to ensure that this issue is resolved without penalty.