Consumer complaint received 2019-10-01
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 was recently the victim of an unfortunate situation involving XXXX, FedLoanServicing, and Federal Student Aid ( FSA ).  If it is not remedied, it will have drastic consequences. 

I was encouraged to complete a consolidation application by FedLoanServicing and XXXX. 

As I was attempting to navigate FSAs confusing 22-page consolidation application, I called both XXXX and  FedLoanServicing, the only places to get help as FSA does not have humans you can contact. 

A person on the phone at XXXX provided contradictory information. I emailed XXXX  ( and have the record ) about being frustrated with their inability to explain.

I then called FedLoanServicing specifically to ask about about filling out the confusing digital application. What I was most worried about is that, by consolidating, I would lose 6 years of Income Driven Repayment payments, as the program discharges the loan after 20 years, so long as you keep making the payments. I was ensured me that I would not lose 6 years of IDR payments I had already made towards the loan if I consolidated. 

However, despite what FedLoanServicing said, I did lose those years. 

I essentially made a paperwork error, due to confusion FedLoanServicing was not able to remedy on the phone. Losing those IDR years will now likely cost me upwards of {$100000.00} as I will now accrue 6 more years of interest at nearly {$40.00} a day, and be indebted for 6 more years of my life.

FedLoanServicing also informed me it was in my interest to consolidate, which it actually was not. It 1 ) hurt my credit and 2 ) It raised my interest rate and 3 ) there was no benefits besides to make things more convenient for the lender. There was no reason for me to consolidate whatsoever, and it ended up costing me dearly. Despite my efforts to do due diligence and find out, I was misinformed on the phone. 

When I realized what I had happened, I immediately requested a reversal of the consolidation, but FedLoanServicing initially said I was 3 days too late. They say this because they sent me a digital message titled your consolidation application is almost complete! In that message it said you have ten days to request changes. But since the title of that message did not say it was extremely important, I didnt open it until 3 days too late to understand that an error had been made. 

I spent weeks fighting with FedLoanServicing over this. They finally recognized and acknowledged their error, and requested that the consolidation be overturned by the Department of Education, but now the Department of Education is refusing to overturn it. If the servicer acknowledged their mistake, and all that I'm asking for is a reversal due to a paperwork error that I attempted to remedy the instant I found out about it, there is no good reason why I should be victimized to the tune of XXXX by the federal government. 

They point to confusing single sentence print in the 22 page application that says that I would lose the years, despite what I was told on the phone. 

I really need help getting through to the Department of Education and explaining that the consolidation needs to be overturned. 

I believe that FSA 's refusal to overturn the application is arbitrary and capricious particularly because there is no harm to FSA in reversing the consolidation. It is not a fair and equitable result when I have done the best I can to stay on top of and repay these loans per the rules and per the instructions, I received from a servicer that I would be treated in this way. 

No American should face $ XXXX punishment from making a paperwork error that they were induced to make by a loan servicer on an automated website for which there is no other human support. 

Thank you for your time,

Company response to consumer: Closed with non-monetary relief