Consumer complaint received 2016-07-12
Company: AES/PHEAA
State: GA
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with my lender or servicer
Sub-issue: Trouble with how payments are handled

Complaint:
Re : Problems with the Public Service Loan Forgiveness ( PSLF ) program I am writing to ask for your help with resolving failures in the Public Service Loan Forgiveness ( PSLF ) program. These failures negatively affect our family directly and will likely affect may more Americans as the program goes into full implementation in XXXX. 

We support the Public Service Loan Forgiveness ( PSLF ) program. However, the program has some policy design failures that exclude eligible loan payers. In addition, Fed Loan Servicing is not properly implementing the program as designed. 

My husband and I have been XXXX at a XXXX university since XXXX. I also served as an XXXX XXXX in XXXX. 

In the course of completing the education required for our profession, we borrowed through the XXXX XXXX Program. When we completed our XXXX in XXXX, we consolidated our student loans and began making monthly payments. We have never missed a payment since our repayment program began in XXXX. 

We applied to the Public Service Loan Forgiveness ( PSLF ) program in XXXX in order to certify our employment and formally enroll in the program. We anticipated that we would be able to apply for loan forgiveness in early XXXX. Unfortunately the program does not consider that we made payments before XXXX and only " starts the clock '' in XXXX. Thus, the earliest we could expect to meet the XXXX qualifying payments is XXXX. 

As you know, there are several criteria for qualifying for the Public Service Loan Forgiveness ( PSLF ) program. And, of course, my status as a former XXXX XXXX means that the lump sum payment I made on my student loans at the end of my term serves as an equivalent qualifying payment. 

When FedLoan Servicing ( our loan servicer ) evaluated both of our applications for the Public Service Loan Forgiveness ( PSLF ) program, they declined to certify any and all of our payments as qualifying for the PSLF. FedLoan Servicing explained that this was because of our repayment plan ( initiated in XXXX ) did not qualify ( item XXXX on the list of qualifications ). FedLoan Servicing did not address or certify my XXXX XXXX payments. 

FedLoan Servicing determined that our repayment plan ( initiated in XXXX ) did not conform to the stated list of qualifying plans in the policy : XXXX ) Income Based Repayment Plan, XXXX ) Income Contingent Repayment Plan, XXXX ) 10 year Standard Repayment Plan, XXXX ) Any Other Direct Loan Program equivalent in payments to the 10 year standard plan. 

FedLoan Servicing informed us that the repayment plan we were on was no longer a loan product offered to borrowers and therefore they could not assess it in the context of the Public Service Loan Forgiveness ( PSLF ) program. Our repayment plan is effectively a legacy repayment plan on which the PSLF program is silent ( as our repayment plan did not exist at the time that the PSLF program was developed or implemented ). Therefore FedLoan Servicing determined that neither of us had made any qualifying loan payments in spite of our 12 years of payment history. They also did not credit me for my XXXX XXXX service. FedLoan Servicing has repeatedly declined to discuss these matters and advised us that their findings in this matter are final. 

I request your assistance with this matter because I do not believe that it was the intention of the legislation to allow loan servicers to arbitrarily decline borrowers from a program for which they are obviously the intended recipients. I am further concerned that other borrowers who are clearly the intended targets of this program will soon find themselves denied as the program goes into full implementation in XXXX XXXX. 

XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX, Georgia XXXX

Company response to consumer: Closed with explanation