Consumer complaint received 2023-07-19
Company: AES/PHEAA
State: OH
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:
We have included a detailed explanation of the history of our student loans below, and where the institution holding that loan, PHEAA and its servicer, AES, have violated student loan and financial regulations. In addition, XXXX, the original loan holder, has not passed on to AES key documentation. For ease of understanding, we have included a summary below : 1. When we received the Master Promissory note for consolidating our previously consolidated loan with AES/PHEAA, we were told by representatives of AES/PHEAA that only one spouse was needed to sign the Master Promissory note. We have since learned that both spouses should have signed the note because the loan was jointly held by both spouses.

2. Our current loan servicer ( AES on behalf of PHEAA ) no longer has the Master Promissory note from our previous loan servicer XXXX XXXX XXXX that should have been part of the documentation when we consolidated our loan. XXXX is no longer in business and can not supply that document. 
3. As a consequence of these mistakes by AES/PHEAA, we may not be able to separate our loans into two loans, one for each spouse, as allowed for in the recently signed Joint Consolidation Loan Separation Act. Without separation, we will not be able to take advantage of the Department of Education programs for loan forgiveness.

4. As a remedy, we are asking AES/PHEAA to allow us to resign the Master Promissory note with both spouses signing. We also ask them to produce the original loan consolidation Master Promissory Note that they should have received from XXXX when taking on the loan, or else be required to forgive the loan for lack of proper documentation. 
Here is a more complete history for context : My wife and I consolidated our student loans with a private company called XXXX under the now defunct Spousal Consolidation program in XXXX. This consolidation took both the several student loans taken out by XXXX XXXX and the several taken by XXXX XXXX into XXXX joint spousal consolidation loan, with join responsibility. However, the Master Promissory Note from XXXX is missing and they can not produce it. 
In XXXX, we re-consolidated the now one loan to AES/PHEAA in XXXX to get a lower interest rate. We were told the only option for reducing our monthly payments was to reconsolidate into another loan ; we were told we could not qualify for any other repayment program, including any of the federal XXXX payment programs ; when creating the new MPN for this reconsolidation, XXXX illegally dropped my spouse 's name - XXXX XXXX XXXX from the MPN and therefore the loan was not issued with her documented consent. At no time were we informed that this reconsolidated would result in not holding a JSCL. We have since learned that this guidance was in violation of the regulations guiding the transfer of spousal consolidation loans, and that both spouses should have been required to sign the Master Promissory note. 
Recently the Federal government has signed the Joint Consolidation Loan Separation Act, signed XX/XX/XXXX, which would allow us to separate the loan back into XXXX loansone for each spouse. We need resolution as soon as possible to understand how to separate or reconsolidate our loans to qualify under the current waivers for XXXX and XXXX. 
As a consequence, we would, separately, be able to take advantage of loan forgiveness programs created by the Department of Education. However, in consulting with the Department of Education, we have been told that unless the Master Promissory note contains both spousal signatures, we will not be able to take advantage of loan separation. In addition, we have been told that even with this Master Promissory note, we may have difficulties without the original promissory note from XXXX showing which loans were part of the original consolidation.T We have contacted AES/PHEAA and they have not been able to produce the original promissory note from XXXX. In addition, they have not offered to allow us to resign the Master Promissory note with them so that both spouses are included.

Company response to consumer: Closed with explanation