Consumer complaint received 2021-06-16
Company: AES/PHEAA
State: CA
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with your lender or servicer
Sub-issue: Received bad information about your loan

Complaint:
I am writing to ask for your assistance with the Department of Educations refusal to take steps to correct an error made by their now-decommissioned agent ( XXXX XXXX  ) while processing my federal consolidation application which resulted in the omission of one account from being added to the consolidation loan. The account WAS included on my application -- apparently at the time XXXX XXXX failed to send XXXX ( then servicer ) sufficient funds to pay off the loan ( for the consolidation ). Of course, I was never advised of this ( nor have I ever been provided any proof that this actually happened ) and did not learn of Direct Loans ' mistake until months later when XXXX continued to send me bills. 

I eventually sought the assistance of the U.S. Department of Education Ombudsmans Office ( Case No. XXXX ). After months of back and forth discussion with their office, my caseworker XXXX XXXX, confirmed that XXXX XXXX did make an error in processing my application to add the loans to the consolidation. She also confirmed that my Request to Add Loans was complete and timely and the account had been omitted as a result of XXXX XXXX failure to follow up on a rejected payment they had submitted to XXXX, my pre-consolidation federal loan servicer. I asked that the Department of Education agree to complete processing the application by simply adding the final loan to the consolidation but was told that the Department refused to do so as it was now more than 180 days after the consolidation had been requested. 
This excuse is unacceptable as the 180-day limit applies to a borrowers request, which I submitted and has yet to be correctly processed by the Department. Further, there is no time limit stopping the Department from processing a timely Request internally as it took 6 months for them to process the request and add the other loans. 

The other excuse I have been provided is that because XXXX XXXX processed the consolidation, they would have to complete the loan addition. This is impossible because Direct Loans no longer exists and the Department now contracts with FedLoan to process these consolidations. The suggestion that it would be impossible to correct the error because the Department now employs a different company to process these applications is outrageous. 

In the end, I was told that I had no recourse because the Ombudsmans Office has no enforcement power and could not compel the Department to take any action. There is no reason the Department can not correct this other than the fact that no one will take accountability for the mistake that was made and that there may not be a process that handles this issue easily. It makes it very easy to point the finger at an entity that no longer exists, but the bottom line is that XXXX XXXX was processing the consolidations on behalf of the Department. Now that responsibility has been contracted to FedLoan, who can certainly be instructed to process the request by someone at the Department. 

In 2017 I sought assistance from my congresswoman XXXX XXXX ' office, and received a letter acknowledging the error by XXXX XXXX but refusing to correct the mistake, also recommending a new separate consolidation for the single loan ( forgoing the years ' of qualifying payments ). 

I am reaching out to CFPB for help as a last resort as I near the 120-payment milestone for my PSLF and neither the ombudsman or congresswoman 's office were able to help. It simply does not make sense that the single loan omitted from the consolidation without my knowledge and through no fault of my own can not be added in accordance with my original application. 

I will attached a few of the documents, including my original consolidation application, the request to add loans, and an excerpt from the Ombudsmans case notes, which I hope will illustrate the issue and how it may be resolved with the cooperation of the Department. I wanted to keep my initial compliant and attachments brief but am happy to provide further detail or more documentation if necessary -- please do not hesitate to ask. Thanks for your help.

Company response to consumer: Closed with explanation