Consumer complaint received 2017-03-17
Product: Student loan — Federal student loan servicing
Issue: Dealing with my lender or servicer — Received bad information about my loan
Company: AES/PHEAA (DC)

A XX/XX/XXXX graduate, I have been making payments on XXXX direct loans since I began work in XX/XX/XXXX. My servicer was XXXX, but when I enrolled in PSLF, my loan transferred to PHEAA. Since XX/XX/XXXX, I have been continuously employed in public service and have made substantial progress toward the 10 years ' worth of qualifying payments under PSLF. I have several additional loans, so I thought consolidating to have one payment would be convenient. 
Not so : Consolidation is disastrous, which I learned too late. I applied for consolidation on XX/XX/XXXX but saw no disclosure then that all my qualifying payments would be erased. In an email later that day from PHEAA, no such disclosure was made. Nor was any such disclosure in the message that PHEAA sent to my paperless inbox on XX/XX/XXXX ( I opted to receive all communication from PHEAA electronically because mail at my house is unreliable ), which advised only that I had 10 days to cancel. 
This week, I was shocked to open a paper letter from PHEAA, which begins : " Dear PSLF Borrower, ARE YOU SURE YOU WANT TO CONSOLIDATE YOUR DIRECT LOANS? Since consolidating your Direct Loans will 'erase ' any qualifying payments you 've already made toward the required XXXX for PSLF purposes, we wanted to confirm that you intentionally included the loans listed below on your consolidation application. '' I opened this letter just after the 10-day cancellation period. Erasing my PSLF payments will require another 3.5 years of large payments despite my qualifying public service. A rough estimate is that I will lose {$50000.00}. 
I have spent days navigating PHEAA and DOE in an effort to cancel the consolidation. After finally reaching a manger with PHEAA, I was told that the loan will not disburse until XXXX. PHEAA explained that they have sent to DOE a request to cancel the consolidation, but that it is entirely up to DOE and that PHEAA can do no more. Personnel at DOE, its Federal Student Aid office, its Ombudsman, and the XXXX have all said that there is no such process for DOE 's approval and that it is entirely up to PHEAA. And I find myself stuck in the middle as the clock ticks toward my financial ruin. 
In my conversation with the PHEAA manager, I complained that I never got an electronic notice warning about erasing PSLF payments. He claimed that he was looking at my paperless inbox and could see the notice was sent to me on XX/XX/XXXX, but that I had not opened it. Simultaneously, I was looking at my paperless inbox, and there was no such letter. I took a screenshot of my computer 's display during this conversation, and I also submitted a complaint with that screenshot to XXXX, as well as left messages with their " customer advocate office, '' which have gone unreturned. Also, after submitting my consolidation application, I submitted a revised Employer Verification Form to PHEAA. PHEAA had my loan only because of my participation in PSLF and it even had post-consolidation submissions that indicated my ongoing participation in PSLF, so it baffles me that they could process a ruinous consolidation without any electronic disclosure of its consequences. 
The PHEAA manager also said that, unlike direct loans, consolidations have no grace period in which to rescind " because graduates are more sophisticated than students. '' I 'll concede my sophistication -- I have advanced degrees, and I even work at the CFPB! But if I missed this, I am certain that others have as well. In another conversation with a PHEAA manager, he confirmed that PHEAA had indeed sent a cancellation request to DOE, but he cautioned that cancellations are available in only a few circumstances. One was servicer error that leads to the inadvertent inclusion of loans. That is my case : A servicer error prevented me from viewing an electronic disclosure, resulting in the inadvertent inclusion of the XXXX direct loans.