Consumer complaint received 2023-12-21
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)

Given that Federal Student Loans were coming out of forbearance in XXXX and payments were due to resume in XXXX, I visited the EdFinancial website ( my XXXX XXXX  servicer ) to make my first payment ( Paid on XXXX  in advance of due date on XXXX  ), as well as set up auto-pay to ensure that I do not miss any payments, risk late fees, credit damage, etc. 

On the same day ( XX/XX/ ) I also calculated out the desired auto-pay payment amounts ( I intended to auto-pay roughly double what the required payment amounts were set to be ), filled out the auto-pay web dialogue, submitted, and received a " submission '' confirmation both on the website itself, as well as via email. 

Fast forward to today, XX/XX/, and I receive an email from the U.S. Dept. of Education providing notice that " you may have recently missed a payment on your federal student loans ''. I quickly log in to EdFinancial Service 's website and discover that my account is nearly 30 days overdue, as my payment due XX/XX/ was never paid. 

Digging through my email in a panic ( I was confident that I had enrolled in auto-pay to prevent this exact situation from arising ) I manage to find the original confirmation email from XXXX  stating " your request to enroll in auto-pay has been received. Below is a summary of your revised payment information '' followed by an accurate breakdown of my desired per-loan payment amounts. 

During this process, I discover I received another email on ( XX/XX/ ) with the subject line " Important Automatic Payment Alert '' ( I did not originally open this email when I received it, which in hindsight was a mistake. However, to me, I believed that such a subject line implies that the " alert '' was just a heads up that my balance had been auto-payed and that the system is working as expected ). Instead though, this email contained a notice " Your automatic payments are not complete. Your most recent attempt to set up automatic payments was not successful. '' Come to find out, over 25 days after I submitted my auto-pay settings, the request was rejected. Never in my life have I seen an auto-pay configuration " fail '', much less 25 days after it was submitted! 

Additionally, at no point between when I signed up for auto-pay and today did I receive an email or warning from EdFinancial Services that my payment was nearly 30 days late. I received an email " statement '' specifying the total due and the due date on XX/XX/, but that was it, nothing else. The only reason I found out my auto-pay conveniently was never successfully configured and I was delinquent on my loans was that the U.S. Department of Education sent me an email directly, NOT EdFinancial Services . 

There is no doubt in my mind that EdFinancial Services is intentionally enacting anti-consumer behaviors intended to confuse and take advantage of the borrowers of the loans they service. 

1. Auto-pay " fails '' to be configured nearly a month after it was submitted? Auto-pay is a standard practice across the industry. Every service provider from telecommunications to utilities to mortgage and loan servicing offer auto-pay. It is a common procedure that should rarely, if ever, fail to be configured, and in the rare event of a failure, they are reported immediately or within a reasonable ( e.g., 3 days ) time-frame, not 25 days. 

2. The auto-pay failure email 's subject line " Important Automatic Payment Alert '' is unacceptably ( and I would argue intentionally ) deceitful. Many other companies that offer auto-pay as a service use similar, if not the EXACT, same phrasing to indicate that an auto-pay transaction has been successfully processed. In fact, my personal credit card uses the EXACT same subject line to indicate auto-pay succeeded! I should not need to open the email to gather the necessary context of such a significant alert. Something along the lines of " Warning : Auto-pay not configured '' or " Failed to process auto-pay request '' would be substantially more clear and effective. 

3. I did not receive ONE SINGLE late payment warning from EdFinancial Services. All emails ( or at least their subject lines ) that I received from them suggested business as-usual. If it weren't for the U.S. Dept. of Education reaching out, I would have never known! Who knows how long this would've gone on for if it weren't for their help. Would they have tacked on late fees? Sent me to collections? Ruined by credit?