Complaint sub-issue: Received bad information about your loan

What follows is a description of the serious problems that I have been experiencing with the Department of Education ( DOE ) and its student-loan servicers, particularly my current servicer, XXXX, which has refused to honor my eligibility for the Public Service Loan Forgiveness ( PSLF ) program. 

XXXX has lately disqualified as PSLF-eligible a decades worth of my monthly payments on the graduated repayment plan and demanded a second decades worth of payments on another, income-based plan. It made this demand in spite of the fact that my previous servicer, XXXX XXXX XXXX ( a direct extension of the U.S. government, not an outside contractor ), had promised that these same payments would qualify my loans for PSLF forgiveness this very year. When I had called XXXX XXXX onXX/XX/XXXX specifically requesting to switch to an income-based plan en route to securing forgiveness 10 years later, the agent informed me that my graduated plan had been grandfathered into the program. She stated that I consequently had no need to switch plans and that I could expect to obtain forgiveness 2 years earlier than I had expected, by XX/XX/XXXX rather than XX/XX/XXXX. 

I was therefore astonished to learn this XX/XX/XXXX that XXXX considers none of my now 15 years worth of monthly payments, including the payments that XXXX XXXX expressly told me to make over the past 8 years, to be PSLF eligible. If, as XXXX contends, I must make another 10 years worth of payments to qualify for the program, I would attain PSLF forgiveness at the earliest in XX/XX/XXXX, 18 years after XXXX XXXX established a clear protocol for my attaining that forgiveness within 8. Even worse, if I were to make an extra decade of payments as this servicer is demanding, I would end up receiving absolutely no benefit from the PSLF program, notwithstanding my 15 years of public service and my timely, uninterrupted payments on my federal student loans since XXXX. 

I. Retroactive Disqualification of PSLF Eligibility OnXX/XX/XXXX, the Department of Education certified my employment, though not my loan payments, as qualifying for the PSLF program. When I finished my XXXX and joined XXXX XXXX XXXX  as an XXXX XXXX in XXXX, I consolidated {$79000.00} in student-loan debt through XXXX XXXX, federal loans ( one subsidized, one unsubsidized ) that the DOE transferred to XXXX to service in XX/XX/XXXX. After I formally applied for the PSLF program in the summer of XX/XX/XXXX, the DOE again transferred these loans, in this case to XXXX, the servicer delegated with sole responsibility to administer PSLF-certified accounts. 

I first contacted XXXX XXXX to determine my PSLF eligibility onXX/XX/XXXX The agent then confirmed my qualifications for the program in every respect, making just three stipulations that I recorded in my notes of the conversation and saved in a XXXX XXXX document that day. These stipulations were to 1 ) continue working at my XXXX XXXX untilXX/XX/XXXX ; 2 ) make regular payments on my current graduated plan throughout that period ; and, finally, 3 ) wait for the program to take effect in XX/XX/XXXX. The sole caution that this agent expressed during our conversation related to future congressional legislation potentially removing the tax-exempt status of the PSLF-cancelled debt. That legislation, which Congress has yet to pass, would cause an exorbitantly large tax burden the year of the forgiveness. 

When I asked the XXXX XXXX agent whether I had to fill out forms, make any changes to the loans, or take any further action to ensure my PSLF forgiveness, she stated that no such forms were in existence and that nothing else was required on my part for qualification. She told me to simply call back in 8 years, just before XX/XX/XXXX, to claim my debt cancellation as a public-service worker. I duly made an appointment in XXXX XXXX to that effect, setting it to fall exactly 1 year beforehand just in case there were any difficulties with the application that might then be available. Because that XX/XX/XXXX date was so far into the future, I also copied my notes from the XXXX appointment into the XXXX document mentioned above and created a second XXXX appointment with an alert falling roughly a month in advance, on XX/XX/XXXX( a date adapted from the date that I called, XX/XX/XXXX ). 

These files clearly itemize XXXX XXXX three stipulations for PSLF forgiveness ; namely, where I had to work, when I should apply, and how I ought to pay. Each also contains a link to the DOEs Fact Sheet on the PSLF program, Loan Forgiveness for Public Service Employees, datedXX/XX/XXXXand downloaded to my computer the day of the call. ( This Fact Sheet is no longer available on the server, but was once found at http : //studentaid.ed.govXXXX ). My main intention in placing this call had been to switch to one of the income-based plans listed on the Fact Sheet. 

The XXXX XXXX agent prevented me from carrying out this objective. She expressly disclaimed any requirement on my part to change my repayment plan, characterizing such a step as both unwise and unnecessary. When I asked specifically whether I needed to switch to one of the plans mentioned on the Fact Sheet to qualify for PSLF, she explained that my graduated plan was grandfathered into the program and hence equivalent to those plans. She moreover cautioned that if I were to switch to another repayment plan, I would forgo 2 years of otherwise qualifying payments that I already made on my graduated plan since the program initiation date ofXX/XX/XXXX 

I recorded this agents remarks not only in the XXXX, XXXX, and XXXX files on my computer, but also via handwritten memoranda that I jotted on a XXXX XXXX repayment schedule, which I had pulled from my files for reference before the call and scanned into my computer two days later. These notations reflect the agents remarks almost in their entirety. I there checked off the payments that I had previously made ; segregated the PSLF-qualifying payments either still to be paid, or already paid, from other payments with a conspicuous line ; and under the words save and forgiven, wrote the amount of cancelled debt in preparation for its possible taxation. I also exported an inventory of the payments already paid from XXXX shortly before saving the PSLF Fact Sheet.  As to the XXXX XXXX agents unequivocal advice not to switch from my grandfathered repayment plan, that recommendation is unequivocally recorded in a detailed email that I sent to my mother immediately following the call with the subject line more good news. 

II. Costly Delays in Processing the PSLF Application The XXXX XXXX agents instructions were to retain my graduated plan and await the program implementation date before contacting the servicer a second time. It therefore was not untilXX/XX/XXXXthat I attempted to locate a PSLF application by following the links available on the DOEs Federal Student Aid ( FSA ) website : https : //studentaid.ed.gov. I was completely unaware at the time that I was actually contacting XXXX, not the DOE itself, the websites then making very little distinction between them. The XXXX appellation, and later the XXXX  email domain of a reply to the query that I had posted on the website, suggested that I was in direct conversation with the federal government about my federal loans. The reply email and all
subsequent XXXX communications featured two logos in equal prominence, one for XXXX and another for the U.S. Department of Education, as if to suggest that these letters were co-authored with the DOE although signed and sent by XXXX alone.
My submission of the PSLF Employer Certification Form ( ECF ) on XX/XX/XXXX triggered an automatic transfer of my loans from XXXX to XXXX. However, it took XXXX over 1 month, until XX/XX/XXXX, to acknowledge this transfer ; 2 and a half months, untilXX/XX/XXXX, for XXXX to do the same ; and a full 6 months, until XX/XX/XXXX to get the inventory of PSLF-qualifying payments that XXXX promised to send upon receipt of the loans. 

Only on XX/XX/XXXX, when I myself called XXXX, was I given any indication of my supposed ineligibility for the PSLF program. I was then shocked to discover that each of the two XXXX agents with whom I spoke anticipated that the company would disqualify all of my past payments due to my graduated repayment plan. And indeed XXXX sent official notice to that effect onXX/XX/XXXX forwarding an inventory counting 0 payments as PSLF qualifying a few weeks later ( XX/XX/XXXX). 

The DOE and its various servicers proved extremely dilatory in communicating this information to me, despite its profound ramifications on my career and finances. XXXX had been servicing my loans for over 4 years, and certainly knew them to be graduated and thus potentially unqualified. Nonetheless, it transferred them to XXXX without bothering to follow up with me, presumably after consulting with the DOE about my PSLF application. XXXX then accepted responsibility for these loans, sending a repayment schedule datedXX/XX/XXXX plainly demarcating them as graduated, even though that servicer likely knew that all of my payments were vulnerable to disqualification on that basis. 

XXXX deferred notice of my consequent ineligibility for the PSLF program, the sole rationale for my transferring the loans, for 3 months after sending its repayment schedule, waiting until well into the next year onXX/XX/XXXX. This failure to communicate would no doubt have lasted considerably longer had I not had the initiative to call and check on my applications status the day before. For in the 6 months intervening between my XX/XX/XXXX application and XXXX XX/XX/XXXXdenial, I could have made a half year of payments on what XXXX considers to be a qualifying plan, perhaps receiving at least minimal benefit from the program. 

With the disqualification of my monthly payments, XXXX has capriciously reset my PSLF eligibility clock : just when I am nearing the last of 10 years worth of paymentsprecisely as instructed by XXXX XXXX 8 years agothis servicer has tacked on another 10 years of additional payments on the very kind of plan that I was unequivocally told not to use in XX/XX/XXXX. Even worse, XXXX has nullified 10 years of my past public service together with 10 years of my past loan payments, since my public service only counts as PSLF eligible when performed concurrently with a qualifying plan. 

The many hurdles that XXXX expects me to overcome to attain PSLF eligibility make a mockery of Congresss College Cost Reduction and Access Act, which directs that the federal student loans of public servants like myself be forgiven in their entirety after 10 years. Indeed, XXXX is compelling me to meet a standard for eligibility more than doubling that of new borrowers. Deprived of first 5 years and then another 10 years of qualifying payments ( those before and after the XX/XX/XXXX initiation date ), I must somehow accumulate a grand total of 25 years of indebted public service before hoping to obtain negligible forgiveness in XX/XX/XXXX. Any borrower, even a borrower with no public service whatsoever, can secure loan forgiveness within that same period on an income-based plan. 

More disturbingly, these hurdles to achieving PSLF forgiveness have multiplied for me even as my actual eligibility for the program has effectively been rendered moot. According to calculations made on the FSA website the day after I spoke with the two XXXX agents, the income-contingent plan, the only PSLF-qualifying plan for which I am currently eligible, would net a scant {$37.00} in forgiveness a decade from now. To obtain that meager sum, I would have to commit to remitting XXXX large monthly payments over the next 10 years from my relatively low public-service salary, only to risk pay [ ing ] more interest over time if I am not found ultimately eligible for PSLF ( per XXXXXX/XX/XXXX disqualification notice ). If I were to take this risk, my first payment to XXXX would be twice my last payment of {$390.00} to XXXX {$680.00} according to the FSA website and {$770.00} according to its ownhowever, had XXXX XXXX allowed me to switch to an income-based plan back on XX/XX/XXXX, before my promotion to XXXX XXXX I would then have qualified for less onerous income-based schedules truly providing the forgiveness that Congress had intended. 

III. Misinformation and Malfeasance All communications relating to the transfer of my loans to XXXX transfer made compulsory by my PSLF applicationhave proved extremely vague and confusing, excessively so even by banking standards. Two letters from XXXX, each dated XX/XX/XXXX, contradict each other entirely : one declares the transfer to be well underway, the other states that it was afterwards cancelled because the DOE found it not necessary for some unspecified reason. The second letter claims to retract the first, yet of course my loans were transferred exactly as that first supposedly erroneous letter had reported. A third letter from XXXX on XX/XX/XXXX confirmed the transfer, thereby retracting the second letter that retracted first without acknowledging the existence of either. On XX/XX/XXXX, when the new servicer XXXX acknowledged the transfer, I received warning that I must pay {$460.00} in capitalized interest. This notice emphatically claimed " This is not a bill, yet set a Pay By date just 3 days after the date of the letter. Nowhere in that notice does XXXX  provide justification for the capitalization, or any explanation of its repercussions. Nor does XXXX provide any means to avert the capitalization besides a check paid to that servicer guaranteed to arrive too late to prevent it. 

The phone communications from XXXX have been no less equivocal. When I called onXX/XX/XXXX to inquire about the status of my application, one agent stated that the income-contingent plan would net me little benefit, while a second agent stated that switching to such a plan was so very urgent as to be authorized that very day. The second agent further remarked that XXXX had sent a message warning me of this urgency onXX/XX/XXXX. Despite the alleged exigency, absolutely no record of that message exists, whether on my own email servers or in my XXXX inbox online. ( I received a copy of this email a few days later, as the second agent had promised, but it looked exactly like the belated! Action Required notices that I have since received, betraying no trace of having been forwarded from a previous time. ) By far the most glaring incongruity is that between XXXX XX/XX/XXXX acknowledgement of the transfer, pledged not [ to ] impact the existing terms of the loans, and XXXX XX/XX/XXXX email with the alarming subject line New Repayment Terms declaring outright that The repayment schedule for some or all of [ my ] student loans [ has ] changed. The loan conditions as described in that schedule are markedly different from those that I had originally contracted with the DOE in XX/XX/XXXX : the first payment, the date of final repayment, and the total amount of repayment are all conspicuously changed. I have yet to receive a corrected schedule, and therefore have no means to compare the terms before and after the transfer, but it is abundantly clear that XXXX drastic reduction of my monthly paymentsan enormous 70 % drop from {$390.00} to $ 280will cost me far more in interest over the long life of the loans should I not arrange additional forms of repayment. 

XXXX classification of my loans in aXX/XX/XXXX letter as not just graduated, but PRE HERA G [ raduated ], suggests that they were indeed grandfathered into the program at some point, if only to have their status retracted, and perhaps re-retracted, in line with the conflicting letters from XXXX. The Higher Education Reconciliation Act ( HERA ) established 10 years of retroactive eligibility for borrowers working in the public sector without establishing a clear, fair, or practicable means of certifying our eligibility after the factparticularly during the first few years after the program was announced. In consequence, I have been faithfully meeting each of the three conditions for PSLF forgiveness that XXXX XXXX prescribed to me in XX/XX/XXXX only to discover that after 8 additional years of public service, the conditions for forgiveness have transformed so radically in the interim as to be impossible for me to fulfill.
IV. Conclusion The long-overdue email from XXXX  formally denying my PSLF eligibility identifies no recourse for appeal. Should that denial hold, I will soon enter my 50s on a comparatively modest public-service salary, paying interest on tens of thousands dollars of student debt well into my 60s with very little means to save for retirement, extricate myself from an underwater mortgage, or cushion myself from emergencies. According to XXXX ( uncorrected ) repayment schedule, I owed a shocking 90 % of my original debt {$71000.00} out of XXXX XXXXwhen my loans transferred to that servicer late last year. Thus despite my past 15 years worth of loan payments, tendered to the DOE every month without fail ever since XX/XX/XXXX, I have had only 10 % ( {$8100.00} ) applied to my principal. This crushing debt is precisely the kind that Congress sought to alleviate by instituting the PSLF program. 

I believe that the actions of the DOE and its servicers are in clear violation of the Fair Credit Reporting Act and other applicable state and federal statutes. The fraud seems apparent on its face, whether it be the fraud of the DOE and its agents, XXXX or XXXX, or some combination of all three. Compelling me to make yet another decade of loan payments purely due to the malfeasance and active misinformation of these lenders and/or servicers would be an extreme and unconscionable hardship. Either XXXX ( perhaps on the DOEs behalf ) erroneously and egregiously disqualified my payments, or the DOE itself, through its own student-debt division ( XXXX XXXX ), deceived me about the eligibility requirements and thereby foiled my timely application for a qualifying plan.