Consumer complaint received 2023-01-23
Company: AES/PHEAA
State: VA
Product: Student loan
Sub-product: Private student loan
Issue: Getting a loan
Sub-issue: Fraudulent loan

Complaint:
The original private education loan was taken out and disbursed in XXXX of XXXX when I was attending North Carolina XXXX XXXX XXXX XXXX University for XXXX year. I was the age of XXXX when this happened. This private loan was extremely " rush ordered '' at the time because I was attempting to cover out-of-state tuition costs that neither the State of VA or NC was XXXX to XXXX me cover ; in which the original lender & AES was aware of XXXX At the time I was living and am still currently living in the state of Virginia when this was all taking place even though I was going out of state for school. My father helped me acquire this loan since I didn't have the slightest clue of how to get or apply for a loan at XXXX, so I wasn't a part of the understanding of this loan. For example, I never knew who the original lender of this private student loan was initially, neither was I exposed to various disclosures of the loan 's terms and conditions. The only page that I was exposed to was the one that required a signature. I also realized that I never personally received a physical or email copy of this loan 's promissory note terms & conditions neither before, during, nor after disbursement of the loan. I asked my father recently if he had a copy of those documents, but he also has no records of them. I just recently reached out to AES and requested a copy of those original documents via mail. After all these years I've now realized that due to me never seeing, understanding, or comprehending, the terms of this loan, I never would have personally agreed to this loan based on what they actually did and was doing while I was still in school. 

A few things were brought to my immediate attention when doing some digging after realizing that in XXXX alone my interest rate doubled throughout the year from 4.6 % ( XXXX ) to 8.2 % ( XXXX ). As of XX/XX/XXXX, it now currently sits at 8.62 %. I also noticed through online records that the original loan of {$32000.00} was disbursed XX/XX/XXXX. On XX/XX/XXXX, {$15000.00} was paid back because it wasn't needed which brought the balance to {$17000.00} because they also charged me interest within that time period ( {$120.00} ). I was completely unaware of all of this at the time until now. Furthermore, from XX/XX/XXXX to XX/XX/XXXX ( Still in school until XX/XX/XXXX ), they were charging me interest capitalization and applying the interest into the principal balance which grew back to {$24000.00}. Then it was done again on XX/XX/XXXX after 2 payments of {$160.00} from the 2 previous months bringing it back up to {$24000.00}. As of XX/XX/XXXX based on online records I have paid {$21000.00} in principal and {$10000.00} in interest which totals {$31000.00} with a principal balance of {$18000.00} remaining. 

I now realize that this loan has been trying to XXXX the life blood out of me and this feels extremely predatory to the point where I have no choice but to file a complaint with the Consumer Finance Protection Bureau and the Federal Trade Commission because I believe they may be in violation of the Fair Debt Collection Practice Act. I was extremely shocked to see the promissory note details and how predatory the terms were when I recently seen the terms. I was under the age of XXXX when this loan took place, and I would have never agreed to this loan if I would have seen, read, and understood this agreement. I also feel that my race/ethnicity of my family may have also been a factor in the predatory terms of this loan given the situation they knew I was in during the application process. My father was the correspondent between original lender/AES and the application process in XXXX at the time due to me being underage. At this point, I am at the brink of seeking legal action against American Education Services and XXXX XXXX XXXX XXXX.

Company response to consumer: Closed with explanation