Consumer complaint received 2024-10-10
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: EdFinancial Services (KY)

I graduated college in XXXX of 2024. I paid towards my loans during school and continued during the 6 month grace period. By now, all o my loans with Edfianancial should have a XXXX balance. However, after I graduated, Edfinancial started accruing interest right away on one of my subsidized loans. I have reached out multiple times through phone calls and online chats, but the customer service reps say that they have escalated the problem and that there is not a specified number of days in which requests are responded.

Loan 1 was/is a subsidized loan, so it should not accrue interest until 6 months after graduation. I confirmed this with Federal Student Loan Aid since I took this loan out 9 years ago and had returned to school for a 2nd time. At the time of my graduation ( XX/XX/XXXX2024 ), the balance was {$3500.00} in principal and {$150.00} in unpaid interest. 

When I paid on Loan 1, it started accruing interest, but I hadn't noticed it right away. After getting this loan down to a {$0.00} balance on their website, I had paid {$3600.00} which is {$7.00} over the balance. In addition, after the system showed a balance of {$0.00}, the next day, it showed a balance of {$11.00}. I reached out to Edfianncial and they said they would fix these issues. However, it is still not resolved and it took at the end of XXXX and early XXXX. 

Instead of fixing the problem, Edfinancial moved the {$11.00} from Loan 1 ( so Loan 1 would have a {$0.00} balance ) to Loan 3 which I was paying towards. This transfer took place on XX/XX/XXXX. I had made a payment towards Loan 3 of a balance of {$760.00}. There is a transaction showing this amount was applied and then removed and replace with a payment amount of {$750.00} which is a difference of {$11.00}. Then, on XXXX, I paid {$1200.00} towards Loan 3. Once again, Edfianancial showed the transaction of this amount applied to my account and then removed, and replaced with a payment of {$1200.00}. These two transactions together make a total of {$11.00} which ultimately was paid towards Loan 1. Instead of Edfinancial removing the interest that accrued on the subsidized Loan 1, the company used my payments to pay this interested essentially swapping this balance from Loan 1 to Loan 3.

As mentioned, I have called and chatted multiple times with the company, and I am not able to get a response or a reason. I have now paid down Loan 3 to the balance that has accrued due to their mishandling of funds. What needs to happen : Edfinancial needs to remove all interest that accrued on Loan 1. Once this transaction is complete, there should be a balance of roughly {$7.00} + {$11.00} = {$19.00}. This balance should then be applied to Loan 3 on the dates that the transactions should have taken place since Loan 3 was accruing more interest than it should. After that, the balance on all my loans should be {$0.00} or even negative. If this shows a negative balance, I should receive a refund check. 

I understand this is only ~ {$20.00}, but I can not imagine the kind of money Edfinancial is making off of mismanaged funds. So I am reaching out to have Edfinancial make things right.

The documents attached show the initial balance of Loan 1 on XX/XX/XXXX2024 as {$3500.00} with interest of {$150.00}. Image 1 is the transaction history for Loan 1 and Image 2 is the transaction history for Loan 3.