Consumer complaint received 2017-06-16
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: AES/PHEAA (OR)

I received an annual request from my student loan servicer, FedLoan, to re-certify for the Income Based Repayment program that I have been on for several years, along with my husband, who also has loans through FedLoan. The letter requested an application had to be submitted through the U.S. Dept of Education website " within 10 days '' of XX/XX/XXXX. I submitted my application on XX/XX/XXXX and my husband confirmed on his end through the US Dept. of Ed that the application was accurate on the same day as required. In past years, the US Dept of Ed website was able to transmit tax data automatically to FedLoan, but apparently this year the tool was not available. I did not receive instructions on the Dept of Ed website to forward or upload my supporting documents directly to FedLoan ( in fact if you try to submit an application directly to FedLoan their website directs you to the US Dept of Ed. ). My husband and I received letters from FedLoan saying our applications were incomplete. I re-submitted my application again, and filed my husband 's application for IBR for a first time, through the US Dept of Education website onXX/XX/XXXX ( within the 10 day window ) at about XXXX PST. I received a confirmation email on both from the Dept onXX/XX/XXXX. There was no indication that there would be a delay in transmitting the application to FedLoan, and no warning on any of FedLoan 's  materials that there is a delay between systems which could impact the receipt date by FedLoan. I  submitted supporting documentation ( XX/XX/XXXX Tax form XXXX ) for my husband and myself byXX/XX/XXXX directly through the FedLoan website " document upload '' but did not receive an email confirmation from FedLoan that the docs had been successfully uploaded. I called a few days later to check on the status of my application and was told the application would be processed and if there was any delay due to the IRS tool being down that FedLoan would consider my application timely. The customer service rep ran an estimate of what my new payment amount would be and it was about $ 550/mo for my loans based our family income. Several weeks later I continued to check to see if my application processed and the FedLoan website did not show a record of my supporting documentation upload, which I thought was concerning. I called again to ask about the status of my application for IBR and this time was told by a customer service rep that my application had been submitted past the XX/XX/XXXX deadline but was still processing. I explained that the letter states " within 10 days of [ XX/XX/XXXX ] and that my husband and I had submitted our applications and required supporting documents within 10 days ( on XX/XX/XXXX ). I received a notice from FelLoan on XX/XX/XXXX stating " Since we did not receive your complete annual documentation, your new payment amount is not based on your income and family size ; however your loans will remain on the Income Based Repayment ( IBR ) plan. Your new monthly payment of {$1000.00} is first due on XX/XX/XXXX. '' This is more than twice the monthly payment I have been making on my loan for the past year. My husband received a notice that he did not qualify for IBR but no reason was given. His monthly loan payment more than doubled from {$93.00} to $ 250+/mo. I called on several more occasions to see if our IBR re-certifications had been processed and was told that there was a significant delay on all borrowers applications for IBR due to the tax tool issue. I received and email from FedLoan on 6/6/2017 stating " We recalculated your monthly payment for the Income-Based Repayment ( IBR ) plan. Your total monthly payment amount is {$890.00}. We are sending you a letter with additional information related to the Income-Based Repayment ( IBR ) plan. I called FedLoan on Monday XX/XX/XXXX to tell them that this amount plus my husband 's $ XXXX/mo payment would not be affordable for us and asked why FedLoan had capitalized the interest on my loan and added it to my principal balance when I submitted everything on time ( capitalized interest of over $ 12K was added, bringing my student loans alone to $ XXXX ). FedLoan asserts that they did not receive the application from US Department of Education until XX/XX/XXXX putting me outside of the " tens days within XX/XX/XXXX '' due date. I explained that I had a confirmation email showing that I submitted on XX/XX/XXXX and they said that they do n't get data from the Dept of Ed for some period of time ( lag between systems ). I stated that it was not my fault that their systems did not work together this year and that the instructions to re-certify did not mention such a delay nor give accurate instructions to upload documents directly to FedLoan to avoid issues in the first place. I requested to speak to a supervisor at FedLoan. I spoke to XXXX ( Account specialist, employee number XXXX XXXX ) and asked her to remove the $ XXXX in capitalized interest because I had made a good faith effort to submit all materials on time and had been given conflicting and misleading information from communications regarding the IBR process by FedLoan and had been conflicting information during numerous ( 4+ ) calls to FedLoan . She said FedLoan would not remove the capitalized interest but she would initiate a " review ''. She stated again there would not be any chance of them removing the capitalized interest regardless of the outcome of the review. FedLoan also would not tell me on the phone how they had calculated our monthly payment amounts - the customer service rep stated that he was not allowed to disclose but that it was not based on my XXXX income ( IRS tax data as in past years ).