Consumer complaint received 2017-02-18
Product: Student loan — Federal student loan servicing
Issue: Dealing with my lender or servicer — Received bad information about my loan
Company: AES/PHEAA (PA)

My complaint is against FedLoan Servicing. On XXXX/XXXX/XXXX, I received my annual notice that my Income-Based Repayment plan needed to be re-certified. I immediately sent the paperwork in. On XXXX/XXXX/XXXX, I received notification that I submitted my paperwork too early, and that my IBR re-certification would not be evaluated at this time. I called FedLoan to get clarification and the representative told me I would not need to re-certify until sometime in XX/XX/XXXX. 

On XXXX/XXXX/XXXX, I received notification that I was being removed from IBR because their records showed I never re-certified. This obviously was incorrect because I had re-submitted my paperwork in XXXX XXXX. I called and the representative ( XXXX ) told me that FedLoan had made an error and that my re-certification application should in fact have been evaluated back when I submitted it. He instructed me to re-submit the application right away and he suggested I enter a forbearance for the month of XXXX XXXX so that I would not have to pay the higher monthly payment ( {$1500.00} ) for that month. I asked XXXX what would happen to the interest that accrued during this period, specifically whether any of it would get capitalized. He told me that interest would continue to accrue but that it would not capitalize. Based on XXXX representations I agreed to the forbearance. 

XXXX also suggested I contact my bank to try to put a " stop payment '' on the automatic payment that was scheduled for XXXX/XXXX/XXXX. I did that, but my bank was unable to put the stop payment in place in time. The money was extracted from my account on XXXX/XXXX/XXXX. 

Also on XXXX, I received a notice informing me that all of the interest that had accrued on my account ( about $ 11k ) would be capitalized at the end of XXXX if I did not pay it all off. This directly contradicted what XXXX had told me. 

On XXXX/XXXX/XXXX, I called FedLoan servicing again to discuss my account. I spoke to a representative named XXXX ( ID # XXXX XXXX. I asked XXXX about the interest notice and explained I felt the XXXX in interest on my account should not be capitalized because XXXX told me that not would happen and because the forbearance did me no good anyway ( because the funds were extracted from my account by direct debit ). I explained I felt I was getting hit with an $ XXXX penalty. She told me that interest capitalized on my account every quarter and that the forbearance would not result in the interest being capitalized. Against my better judgment, I believe XXXX. 

On XXXX/XXXX/XXXX, I received notification that the $ XXXX of interest had been capitalized. This directly contradicted what XXXX representatives had told me. Further, it would not have happened if FedLoan Servicing had properly re-evaluated my application for IBR re-certification in the XX/XX/XXXX. I want my account to be set so that the $ XXXX that was capitalized is returned to being interest. I carried out my obligations with respect to submitting re-certification paperwork, and FedLoan Servicing negligently serviced my account and punished me for their errors.