Consumer complaint received 2015-07-20
Product: Student loan — Non-federal student loan
Issue: Can't repay my loan — Can't get flexible payment options
Company: AES/PHEAA (PA)

I have XXXX private student loans totaling {$29000.00} with AES. AES does not offer practical repayment options that are available to to me from my Federal backed loans. Instead, AES offers me a gradual repayment plan ( " XXXX XXXX '' for 36 months ) and an interest-only repayment option ( " XXXX XXXX '' for 24 months ). After Select XXXX and XXXX are exhausted, AES plans to demand a standard repayment plan from me. AES applies the 'Simple Interest Formula ' to all student loans, applying a daily interest rate that, in combination with a standard repayment plan, is unaffordable. Unless I participate in a repayment option, I can not afford my AES loans. AES has never been forthright about what options I may have to repay my loans. When asked, AES could not produce information about how they calculate interest or how they determine how much of my payments are applied to interest and how much is applied to principle. 

AES does not offer an income based repayment plan or any other monthly-payment relief except for an extended term. Since AES applies Simple Interest, extending any term multiplies the amount of interest I will pay over the life of the loan. 

AES applies Simple Interest, calculated monthly, and is paid first, unlike a traditional loan. A traditional loan would pay a set interest amount and later principle, allowing a debtor to eventually pay off the loan. 

Instead, AES calculates my interest payments each month and consumes the majority of every payment I make. So little of each payment I make is applied to the principle of my loan that my principle remains the same. AES charges me the same or higher interest, and I make the same payment ( since I can not afford a higher payment ), and the cycle continues indefinitely. 

I can not meaningfully reduce the principle that I owe. Right now, AES is taking XXXX % of each payment I make for interest. At this rate, I will never be able to repay my loans, despite never missing a payment. 

AES tells me they are no longer offering student loans. In addition, there is no market for private student loan refinancing or consolidation. I am stuck with AES ' unforgiving Simple Interest calculations and its lender friendly terms and conditions without finding the right balance of affordable, meaningful student loan repayments. 

I wish the CFPB could step in an demand that AES and all private student loans stop applying monthly, variable simple interest calculations. Set a specific interest amount that would be fair as a loan, and let me pay my interest and principle down. I also want the CFPB to require private student lenders to provide all debtors with income based repayment options, and minimum amounts applied to principle, so I can afford and pay down my private student loans. 

Since I do not have the money to pay off my loans, I need regulatory intervention so I can incrementally get out of debt. I am stuck paying simple interest calculations every month and, unless I have several hundred dollars a month to apply to my AES loan ( I do n't! ), I will never make meaningful change to my private student loans. This cycle will never end, and AES does not appear to mind.