Consumer complaint received 2018-08-16
Company: AES/PHEAA
State: VA
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with your lender or servicer
Sub-issue: Trouble with how payments are being handled

Complaint:
Primary Issue : XXXX XXXX ( PHEAA ) is the loan servicer of my XXXX XXXX XXXX Federal Direct Loan consolidation as well as my Federal Special Direct Consolidation Loan. In XX/XX/XXXX, I updated my direct debit to begin to pay an extra {$270.00} per month to one of my XXXX XXXX XXXX Federal Direct Loan consolidation. XXXX XXXX has twice changed my direct debit information without my consent to allocate some of that extra payment to my Special Direct Consolidation Loan and I have had to manually change it back. 

Secondary Issue : I have a standing letter to allocate any extra payments made to my XXXX XXXX XXXX Federal Direct Loan consolidation to one specific loan sequence within that consolidation. This standing letter is required as XXXX XXXX electronic system can not accommodate my desired payment allocation. 

Background : I am a participant of the XXXX Special Direct Loan Consolidation Program whereby I had XXXX XXXX XXXX Federal Direct Loans consolidated with the Department of Education under one program and commercially-held Federal Family Education Loan ( FFEL ) consolidated under another program. The program consolidated my commercially-held FFEL loans as a Special Direct Consolidation Loan and moved the new loan as well as my existing XXXX XXXX XXXX Federal Direct Loan Consolidation to one servicer so that I can make one payment per month to one servicer without having to re-consolidate the loans together. 

My XXXX XXXX XXXX Federal Direct Loans are consolidated with a disbursement date of XX/XX/XXXX. The consolidation consists of two parts : 1. Direct Loan Subsidized Consolidation ( DLSCNS Sequence 1 ) 2. Direct Loan Unsubsidized Consolidation ( DLUCNS Sequence 2 ) My Special Direct Consolidation Loan has a disbursement date of XX/XX/XXXX and also consists of two parts : 3. Direct Loan Special Consolidation Subsidized Loan ( DLSCSC ; Sequence 3 ) 4. Direct Loan Special Consolidation Unsubsidized Loan ( DLSCUC ; Sequence 4 ) PAID IN FULL XXXX XXXX AKA the Pennsylvania Higher Education Assistance Agency ( PHEAA ) is the servicer of my consolidation loans under the program. 

Timeline : In speaking with XXXX XXXX customer service via telephone in XXXX of XXXX, I expressed a desire to submit extra payment only to DLUCNS Sequence 2 of  my loan consolidation as I noted that while I could change my direct debit to apply an extra payment to either of my consolidated loans, I can not apply them to specific loan sequences within the consolidations. The representative told me that their system could not accommodate such a request as they can not differentiate between DLSCNS Sequence 1 and DLUCNS Sequence 2 under the same consolidation when applying an extra payment. They did advise me that I could submit a letter with standing instructions to allocate the payments as desired and the payment would be reallocated after the fact. 

On XX/XX/XXXX, I submitted a letter [ Attachment 1 ] with standing instructions which indicate that any additional payments made toward my XXXX XXXX XXXX Federal Direct Loans be first applied to DLUCNS Sequence 2 until that loan is paid in full. 

On XX/XX/XXXX, XXXX XXXX replied with a letter [ Attachment 2 ] approving my standing instructions. 

Later in XXXX of XXXX, I changed my direct debit information to pay an additional {$270.00} to my XXXX XXXX XXXX Federal Direct Loans. XXXX XXXX replied with a letter on XX/XX/XXXX acknowledging the changes [ Attachment 3 ]. My direct debit payment dated XX/XX/XXXX included the extra payment. The extra payment was subsequently reallocated per my standing instructions. 

In XX/XX/XXXX, I logged into my account to review my direct debit information. I noticed that a portion of my standing extra payment was now allocated to my Special Direct Consolidation Loan. I did not make this change nor was I notified of the change. XXXX XXXX made this change without my consent. I changed my direct debit information to allocate my extra payment as originally indicated. On XX/XX/XXXX, XXXX XXXX replied with a letter acknowledging the changed [ Attachment 4 ]. 

On XX/XX/XXXX, I again logged into my account to review my direct debit information and I again noticed that a portion of my standing extra payment was now allocated to my Special Direct Consolidation Loan. I did not make this change nor was I notified of the change. XXXX XXXX  made this change without my consent [ Attachment 5 ]. 

I changed my direct debit information to allocate my extra payment as originally indicated and I called XXXX XXXX. The representative with whom I spoke could not explain why XXXX XXXX was changing the allocation of my specified extra payments. He simply stated that, Sometimes the computer systems dont work the way they are supposed to. We have recently upgraded a lot of our systems and there may be some glitches. 

He could not tell me whether this issue would happen again or if I would have to review and manually change my standing direct debit every month to ensure that the payment is allocated toward the desired loan consolidation.

Company response to consumer: Closed with non-monetary relief