Consumer complaint received 2019-05-22
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: AES/PHEAA (IN)

I have had this same issue with FedLoan Servicing multiple times in the past, but just today ( XX/XX/2019 ) I came away frustrated yet again with their incompetence at handling direct debit payment information updates. 

On XX/XX/2019, I was notified via email that my student loan payment would be directly debited from my checking account on file on the next due date, XX/XX/2019. I knew the checking account on file was not up-to-date, so I took action to correct this information. 

On XX/XX/2019 I submitted a Direct Debit Update form via the FedLoan Servicing online portal, as directed by their system. I then attempted to delete the previously " saved account '' from my online portal, but was unable to do so. 

However, I double-checked the direct debit page of my account, and the direct debit information listed had been updated to show my newly entered bank information, per the form I submitted. I fully expected the automatic payment to be debited from that new account on XX/XX/XXXX and didn't think anything would go awry. 

Today, XX/XX/2019, I checked my checking account and no withdrawal was made from my updated bank account by FedLoan Servicing. I then signed into FedLoan Servicing 's website to check my online account. It stated a payment had been made on XX/XX/XXXX, but I could not see from which bank account it had been attempted to be withdrawn. 

I called FedLoan Servicing immediately for clarification, and the customer service representative I spoke to was completely incompetent. She was only providing me with canned answers to questions I wasn't even asking, and was not helping me get to the root cause of and potential solution to this issue. 

It wasn't until almost 10 minutes into the conversation that she told me their system had attempted to debit my previous/old bank account on file, and that " FedLoan Servicing does not process direct debit updates for one to two full billing cycles '' ( one to two months ). So, even though the online system updated the information back on XX/XX/XXXX, here it is XX/XX/XXXX and she is telling me that it was my responsibility to call them and ask if they'd had the time ( over the past two weeks ) to process a simple direct debit update? 

After struggling to get anywhere with the customer service representative, I inquired if this payment would be considered late, because it was their system 's error that it was debited from the incorrect bank account. She told me a two-sided answer that did not fully answer my question. She said that the payment would be considered late " internally with FedLoan '', but that they would not report it was late to the credit bureaus. I asked if there would be any penalty because this payment would be " internally '' considered late, and she again gave me a run-around answer. She also could not answer me when I asked if the .25 % interest rate incentive under the direct debit program would be revoked during the " one to two billing cycle '' lag period in their processing of my direct debit update. I was left with no answers, even though I asked the same question in different ways, multiple times. 

I know when I'm being misled, and I feel I am being tricked into believing the smoke and mirrors created by this company. If their system ( my online account summary ) showed the NEW bank account information I submitted to them nearly 12 days ago as my direct debit information, why would it STILL take them one to two more billing cycles to process the information? I became so frustrated with the run-around " answers '' the representative was giving me, that I hung up the phone and just paid the amount due from my current checking account via their online system so that my payment wouldn't be considered late. 

On XX/XX/XXXX, I retained receipt of my direct debit update form submission for my own records as a PDF. Nowhere on this form does it indicate a " one to two billing cycle '' lag time to update an EXISTING direct debit enrollment. The form indicates a one to two billing cycle delay for a direct debit agreement to be initially set up as a new direct debit enrollee. 

This servicer should be ashamed of itself for this misleading and lazy behavior, and for also putting my loans into forbearance ( rather than deferment ) MULTIPLE TIMES in the past, when I was not offered an alternative that would lighten the burden on me as the loan borrower. 

I am so appalled with FedLoan Servicing that I am writing to Congress to be a voice for my generation on this gargantuan failure for college graduates. 

My loan balance has nearly doubled in just 4 years ' time. I was supposed to be classified as " in-school status '' from XXXX, but I feel my loans were only augmented or inflated by FedLoan Servicing during that time. I have a 5.63 % interest rate. Something doesn't add up. 

I was never aware my balances were growing so rapidly, until I started being my own advocate this year. I'm completely appalled. These incompetent moneygrubbers should be prosecuted for knowingly withholding the best options and not offering the most positive support and information they can to student loan borrowers like me.