Consumer complaint received 2018-10-21
Product: Student loan — Federal student loan servicing
Issue: Struggling to repay your loan — Can't get other flexible options for repaying your loan
Company: AES/PHEAA (LA)

My request for an Income-Driven Repayment ( " IDR '' ) plan was improperly rejected on the basis that I do not qualify as having a financial hardship, when, in fact, I clearly do. 

I am married, and our combined gross income is {$97000.00}. My payment is about to increase to {$1300.00} monthly, which is {$16000.00} yearly. In other words, my monthly payment is about to increase to 16 % of our total gross income. 

For an Income-Based Repayment ( " IBR '' ) plan, a " partial financial hardship '' is defined as follows : " The annual amount due on your eligible loans, as calculated under a 10-year Standard Repayment Plan, exceeds 15 percent of the difference between your adjusted gross income ( AGI ) and 150 percent of the poverty line for your family size in the state where you live. '' The federal poverty line for a family of two ( 2 ) is $ XXXX/year. Thus, our total gross income minus 150 % of the federal poverty amount is {$72000.00}. {$97000.00} - ( $ 16,460*1.5 ) = {$72000.00}. Fifteen percent ( 15 % ) of this amount is {$10000.00}. As {$10000.00} is less than {$16000.00}, I qualify as having a partial financial hardship as defined for an IBR plan.

For a " Pay As You Earn '' ( " PAYE '' ) plan, a " partial financial hardship '' is defined as follows : " The annual amount due on your eligible loans, as calculated under a 10-year Standard Repayment Plan, exceeds 10 percent of the difference between your adjusted gross income ( AGI ) and 150 percent of the poverty line for your family size in the state where you live. '' Ten percent ( 10 % ) of {$72000.00} is {$7200.00}. As {$7200.00} is less than {$16000.00}, I qualify as having a partial financial hardship as defined for a PAYE plan. 

Since I graduated from XXXX XXXX in XX/XX/XXXX, I have made payments on federal loans from two ( 2 ) servicers : ( i ) XXXX ; and ( ii ) XXXX XXXX ( a.k.a. the Pennsylvania Higher Education Assistance Agency ). I have been on an Income-Driven Repayment ( " IDR '' ) plan for both loans, and my monthly payments have been manageable. 

In XX/XX/XXXX, I received a notice that it was time to re-certify my IDR plan. The letter from XXXX XXXX stated that, if I did not rectify my plan, my monthly payment would go up to {$1300.00} per month ( see attached letter ). 

I filled out the necessary information online. When asked whether anything regarding my income had significantly changed since I filed my XX/XX/XXXX tax return, I marked " yes. '' Since XX/XX/XXXX, I have been employed as an XXXX and have a higher income than last year, particularly since I was not employed at all for most of XX/XX/XXXX. I provided both servicers with my employment contract, my last two paycheck stubs, and my wife 's last two paycheck stubs. 

On XX/XX/XXXX, I received an email from XXXX XXXX stating that my request had been received ( see attached email ). On XX/XX/XXXX, I received an email from XXXX XXXX stating that my request had been denied ( see attached email ). The email stated that a letter would be mailed to me explaining the reasons for the denial. I never received the letter. I also tried calling the phone number in the email ( the only customer service phone number for XXXX XXXX that I could find ), but there was not an option to speak to a human being, and I was played an automated message stating the exact same thing that was stated in the email ( that my request had been denied and they would send me a letter explaining why ). 

On XX/XX/XXXX, I sent a customer service email to XXXX XXXX   asking for more information. I requested an explanation of why my request was denied, as I know that I do not make enough money not to qualify for the plan. On XX/XX/XXXX, I received an email from XXXX XXXX responding to my request. The email ignored most of my questions and simply stated that I did not qualify as having a partial financial hardship, without explaining why. 

My understanding is that my monthly payment under an IDR plan would be approximately {$900.00}, and that under a PAYE plan it would be approximately {$600.00}. As the request I submitted asked that I be placed on the repayment plan with the lowest monthly payment, I can think of no reason that my monthly payment should be greater than {$600.00}. Further, this may be a high estimate, as I understand that my monthly payment should be calculated based on my " discretionary income, '' whereas the calculations I performed used my total gross income. 

My income is a combination of salary and quarterly incentive payments, as described in the attached documentation. When I originally submitted my request to recertify my plan, I still had one ( 1 ) incentive payment left for the year XX/XX/XXXX. Thus, it was not entirely clear what my income for XX/XX/XXXX would be. However, in order not to qualify as having a partial financial hardship under the IDR plan, our combined income would need to be at least {$120000.00}. Under no reasonable interpretation of the documents that I submitted to XXXX XXXX could I be deemed to make that much. 

I believe it is absolutely clear that Studentloans.gov and/or XXXX XXXX   was in error in making these calculations. However, I have not even been provided with so much as an explanation of how or why they determined that I do not qualify. I believe I am entitled to such an explanation at the very least.