Consumer complaint received 2018-03-05
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 seeking Public Service Loan Forgiveness ( PSLF ). I started working at a XXXX XXXX XXXX XXXX in XX/XX/XXXX and have made 47 on-time payments under Income-Based Repayment ( IBR ) plan so far. I have submitted Employment Certification Form ( ECF ) inXX/XX/XXXX andXX/XX/XXXX. Their acknowledgement letter says We will provide you with notification of the number of qualifying payments you have made during the qualified employment period listed above however such notification was never received in writing. XXXX XXXX website posted payments due every month, but there was never a notification of this important matter. Ive been submitting my monthly IBR payments for the past 4 years thinking I was on track to PSLF until three days ago.

Every month I go to XXXX XXXX website to make my monthly payments. This month, I was being placed on Disaster Forbearance which I never applied for, and there is no natural disaster in my area. I started looking into all the links on the website and realized that 4 of my 14 loans were listed as Not eligible for PSLF. I was terrified. After studying what Direct loan means rigorously for the past 3 days, now I know the difference between FFELP vs. Direct loans. However this is something you wouldnt know unless you really study all the fine print of the loans and are financially savvy. All my loans came from the Federal Government so I thought they were all direct. The PSLF pamphlet I received back in XX/XX/XXXXstates the eligible loan types as ANY Direct Loan Subsidized/Unsubsidized Stafford, Plus, Consolidation. My FFELP loans were listed as simply Stafford and Plus on loan description, which are the exact words included in the list above. It made me believe my Stafford and Plus loans were PSLF eligible. I also noticed that studentaid.ed.gov PSLF webpage recently added more clear paragraphs regarding FEELP vs. Direct loans. However, it wasnt as clear back in XX/XX/XXXX when I actually looked into PSFL.

So basically I have to start the 120 IBR payments all over again. Even if I get all the direct Loans forgiven after 73 payments, the 4 remaining FFELP consolidation loan balance will be too large that I will have to make full IBR payments 47 more times.

While I believe important letters like this should have been delivered in writing in XX/XX/XXXX when I first submitted my ECF.

After further looking into this matter, I realized that I was not alone. I read numerous news articles about loan servicers misguiding students regarding PSLF. I also read about class action lawsuit. So I decided to look out for help as well.

Fedloan servicing should have provided a written letter regarding non-PSLF qualifying loans upon receiving ECF, and their failure to do so misguided me into believing I was in good status for PSLF for the past 47 months. This will cost me approximately {$80000.00}, having to pay start the 120 payments all over again. I would like see if anyone can help me to correct the issue.

Thank you so much for your help in advance.

Company response to consumer: Closed with explanation