Consumer complaint received 2019-05-11
Company: American Student Assistance
State: MA
Product: Debt collection
Sub-product: I do not know
Issue: False statements or representation
Sub-issue: Attempted to collect wrong amount

Complaint:
Background : On XX/XX/XXXX I filed a complaint with you ( CFPB # XXXX-XXXX  ) regarding American Student Assistance ( ASA ) & XXXX XXXX XXXX XXXX involving what I suspected to be unfair and deceptive practices involving a FFELP Consolidation loan. Rather than respond to your inquiry as is customary, ASA responded to my complaint in a letter which they mailed via U.S. Mail dated XX/XX/XXXX and which included ( for the first time ever ) partial copies of the initial Federal Stafford Loan documents which I had believed were consolidated, the consolidation loan which I believed to have consolidated those loans, and then a subsequent rehabilitation loan document for the same consolidated loan which I had defaulted on due to significant hardship at that time. Also enclosed was a Loan History page printed from the Federal Student Aid website which is subtitled " Grants '' and " Loan History '', then " Aggregate Loan Information '', and " Loan Summary '' In a separate response through your website I received a response from XXXX who was the alleged servicer to whom XXXX had transferred servicing to and attached to their response were two spreadsheets from XXXX beginning in XX/XX/XXXX, and another from XXXX which began in XXXX through XXXX. Separately I also received a response from XXXX  ( XXXX ) through your website which attached the same consolidation loan document that ASA had attached to their letter dated XX/XX/XXXX. Later I received a check from XXXX for {$.00} cents of " overpayment ''. I tried to respond to this via U.S. Mail but my letter was returned to sender, no known addressee.

Importantly, the two initial federal student loans ( Stafford ) documents that they sent me show that a. ) I had signed BLANK loan applications as I was directed by the financial aid department ( s ) at XXXX XXXX XXXX College in XXXX, Massachusetts ( XX/XX/XXXX ) for {$1200.00}. which I had written in and is typed into the box titled " Certified Loan Amount '' ; and at XXXX XXXX College in XXXX, Massachusetts which was for {$10000.00}. which I signed and dated XX/XX/XXXX ; and b. ) NEITHER LOAN WAS EVER APPROVED BY THE LENDER. In fact the copy that ASA sent me shows the loan application I signed on XX/XX/XXXX is still blank. Equally important is the custom/policy the schools had of not providing me with a copy of either loan document at the time and I have never seen any proof that any amount was actually paid to the schools for my tuition and fees. I was never asked to endorse any loans for the school. 

Also these " Application and Promissory Note for Federal Stafford Loans '' are copies of the original note - Lender Copy A and contain the logo of American Student Assistance ( ASA ) on the form, which leads me to conclude that ASA was the lender and not the guarantor, which was materially omitted from all communications. All of these facts contributed to the reason I falsely believed that the consolidation loan represented my student loans, because the consolidated loan was also originated by XXXX XXXX College as was a separate Perkins Loan in XXXX so I reasonably relied upon their expertise since they had all the records, or so I believed. Notabably, the XXXX loan is signed by XXXX XXXX on XX/XX/XXXX and whose title was " State Association ''. Finally, the copies of these loans include ONLY THE FRONT PAGE. There is no back page and no borrowers disclosures. 

Prior to my graduating in XX/XX/XXXX, I applied for sales position with XXXX XXXX and was hired in XX/XX/XXXX with a start date of XX/XX/XXXX. The consolidated loan document that I signed was sent by XXXX XXXX College via US Mail in XX/XX/XXXX which I signed and returned to them. I didn't have a photocopier then and I presumed they'd send me a copy of the loan document if it was approved. However the next thing I received was a loan repayment booklet from XXXX XXXX XXXX. I defaulted in XXXX due to excessive legal expenses related to my attempted divorce. ASA began collection attempts, then XXXX XXXX XXXX OBO ASA or at least that was what I was led to believe. 

My new understanding based on the past two years of research, communications and activity leads me to conclude that ASA sold the debt to XXXX and created a completely new lien which also rolled in almost {$4000.00} of collection costs and fees and which XXXX originated ( unbeknownst to me ). Thus ASA 's definition of " Rehabilitation Loan '' is not the same as the U.S. Department of Education 's definition of Rehabilitation Loan. It seems that ASA is in the business of issuing securities rather than administering the U.S. Federal Student Aid Loan Program. 

In fact, the letter that ASA wrote me dated XX/XX/XXXX explicitly admits that the initial consolidation loan was theirs and they were holding it. Not only that but the document they sent me shows that the consolidation loan exceeded the alleged amount owed, which actually aren't even the two loans I signed, they are two completely separate loans that I have no record of and did not apply nor consent to. 

The other potential place the XXXX loan originated in XX/XX/XXXX came from was also without my knowledge or consent, the training program with XXXX XXXX which I was unaware was not a sales job but was evidently a " vocational education program '' which I had no idea. XXXX XXXX had a mandatory boiler plate Employment Agreement for employment at will that they required I sign before I started and it requires that I acknowledged that I pay them back if I voluntarily left the firm in my first three years of employment. I worked at XXXX XXXX until XX/XX/XXXX ( 17+ years ) so I would have never attributed that amount to them until I ( a ) Discovered in XXXX that " XXXX XXXX Human Resources Benefits Department '' was really XXXX XXXX which is owned by XXXX/XXXX ; ( b ) in reviewing the student loan documents noticed forbearance documented I received ( but did not request ) dated XX/XX/XXXX, that equaled the amount I would have owed had I voluntarily left XXXX XXXX in XX/XX/XXXX, and found evidence of false loan documents originated by XXXX which were sent to me over the years which I never signed or returned, aligned with the timeframes in the spreadsheet sent by XXXX where the student loan appears to have been " reconsolidated '' without my knowledge or consent. It seems that they were under some kind of obligation to keep the loan principal at 95 % of original issue - because apparently someone was using it as collateral - my federal student loan appears to have been used as a CDO. 

Interestingly, my tax records for XXXX contain a 1098E from XXXX XXXX XXXX XXXX XXXX ( XXXX ) which is the agency name for ASA which is a DBA ; for the interest they earned on my loan at the time that the loan was allegedly in " rehabilitation '' and they capitalized almost 4k in collection costs, I looked up the EIN and it turns out that it is the Deferred Compensation Plan of the ASA Employee Welfare   Plan ( 401a ) which is a conflict of interest. Not only that but at that time the U.S. Dept. of Ed didn't charge collection costs for rehabilitation loans yet. When I mentioned this to ASA in a letter, they wrote back that they would ask " The Department of Education ''. I responded that they clarify if they were speaking of the U.S. Department of Education or the Massachusetts Department of Education. I never heard back but then I received notice that XXXX was servicing the loan. XXXX simultaneously discontinued collection efforts, probably to make it appear as though the loan is one and the same. 

Eventually ASA sent it to XXXX XXXX XXXX XXXX for collections. I disputed the debt and asked for verification but received none. I also informed them that in addition to all of the above, I was never eligible for the student loan in the first place because I had never graduated from high school. They sent me an expired U.S. Department of Education form to complete. I responded letting them know that their form was expired and they sent me another collection notice. 

Finally on XX/XX/XXXX I mailed XXXX. XXXX XXXX  XXXX an affidavit signed under the pains and penalties of perjury with exhibits attached. I didn't hear from them and so on XX/XX/XXXX I emailed them and asked what the status was since I hadn't heard from them and also asked if/how the CFBPB 's  consent order with XXXX would affect their collection activity. I have not heard back. 

Instead, I received a letter a few days later from XXXX XXXX XXXX attempting to collect the debt for American Student Assistance ( ASA ). I have no idea if ASA issued ANOTHER security and this is in addition to the one XXXX  XXXX XXXX XXXX is attempting to collect or not. I haven't received anything back from XXXX XXXX XXXX  XXXX indicating that they have ceased collection. I don't know if they refused to collect after receiving my affidavit, or if they transferred it directly to XXXX XXXX XXXX. 

As I researched further, I discovered that the US Dept of Education doesn't even allow for  consolidation of " CONS '' ( Consolidated ) Loans. No disclosure, no signature, no notice, nothing. They are just printing money basically. Apparently Massachusetts Securities Law must conflict with Federal Security Law because I can not think of any other valid reason who this would be allowed to happen. 

As you can imagine, this is incredibly frustrating as it has completely damaged my credit. I can't look for a job because no one would hire me with a bad credit report and I can't collect unemployment because I'm not 'available ' for work until I can get someone to correct my credit report.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation