Consumer complaint received 2022-04-23
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: AES/PHEAA (CA)

I accrued around $ XXXX in multiple loans serviced by FedLoan in XXXX while I was pursing my XXXX XXXX XXXX in XXXX XXXX at XXXX University XXXX The way these loans were disbursed is that I would receive a new loan each semester based on my financial needs for that semester. Ultimately this ended up in me having several different loans within a short period of time. Upon graduating and entering the workforce I began making payments. My goal was to my payments as high as I could afford to help pay them off faster. Since all of these loans were under the same account I only had to make " one '' payment which would be applied to all of the loans. I took some periods of forbearance when I was making moves between jobs and the loan servicers told me how easy it was to simply take forbearance as needed. I kept these periods to a minimum just as much as I needed to recover from moving expenses. 

It wasn't for several years that I stopped to take a closer look at the handling of my payments. Not having had experience with significant debt, it was not until a later stage in my life that I realized that FedLoan had been taking my one monthly payment and spreading it out across all of my multiple loans. As a result I was barely making an indent in any one loan and simply paying interest for all of these years. When I realized how they were handling my loans I began to dig deeper and spoke to representatives to find out that I could now choose how my monthly payments were applied to various loans. At this point I chose to focus my efforts on one loan at a time to pay down the one with highest interest while keeping the others in good standing. I began to make some progress in my loan repayment but it was very discouraging to realize that I'd already paid around $ XXXX over the years only to have my principal balance be higher than when I started. 

Today with all of the federal government 's talk about student loans, I revisited my payment history and have found that I've paid {$42000.00} of which {$19000.00} has been applied towards my principal and {$23000.00} to interest. 

I am filing this complaint because I believe the loan servicer to be predatory and reckless in the handling of my payments. Any reasonable loan counselor would have realized it best to apply my payments to ONE loan at a time. In my opinion since there was ONE servicer of my loans which were all under the same account they should have recognized that I was making my payments and therefore kept all loans in good standing while focusing repayments to one loan to help me recover from the debt in the most efficient way possible. Instead they chose to apply my payments across all loans, very possibly intentionally choosing to keep me in debt for as long as possible.

When I realized what had been happening those first several years I reached out to FedLoan to speak to them about this. I spoke to them so many times and escalated my concerns. Ultimately I was told that I ended up speaking to the highest person I could reach and even they were of no help to me. They scolded me, lectured me about being responsible with my payments. They told me that they had to help their own children with student loans. They told me that I should look into loan consolidation with an outside party. To me, this signals a major flaw in the system if the employees themselves are unable to provide any real guidance to succeed within their own system. 

Personally I have ZERO PROBLEM paying back any debt I owe. However, I feel that the federal student loan program has failed many people in many ways. In my experience the loan servicer was XXXX  and XXXX  with the handling of the payments. I feel that to some extent I should receive forgiveness for some of my loans. I understand the principals between accruing interest and such, so I realize that I would've have always paid over the original $ XXXX however I shouldn't have paid over $ XXXX at this point and STILL OWE $ XXXX. I am at a point in my life now where I am married, I have XXXX children, and until the pandemic was working full-time. Even with myself and my husband both working full-time we can not afford to purchase a home for ourselves. The pandemic required me to quit my job and be home with my children as school when into virtual mode and now we have to go into our savings each month to make ends meet. I feel that I have done the best with my circumstances in my student loans up to this time and the idea of still owing $ XXXX when payments resume is gross to me. 

My hope and plea is that there is an individual on the other side reading this complaint and recognizes that perhaps there is something to what I am complaining about and can look into my situation further. Thank you for your time and consideration.