Consumer complaint received 2017-05-08
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Don't agree with the fees charged
Company: AES/PHEAA (AZ)

FedLoan Servicing : My lender is FedLoan Servicing. I am in the Public Service Loan Forgiveness Program. As part of the program, I have to recertify my loans each year on an income-driven repayment ( IDR ) plan for which I also receive repayment assistance from my XXXX School. I received a notice from FedLoans about XX/XX/XXXX that I had to recertify my loans by within 10 days of XX/XX/XXXX for the next calendar year. I have been in this same ( IDR ) plan for about 5  years. This year I was in the same job with no significant changes to my income, so I only needed to prove my income and fill out a recertification form. This is about to be a very long and very frustrating story. The short of it is FedLoans XXXX XXXX my loan recertification for this year starting about XX/XX/XXXX and continuing through today. I found out while talking with them over the phone about XX/XX/XXXX that they capitalized the interest on my loans to my principal ( without telling me ) ( twice ). The amount of capitalized interest spread between my loans was about {$40000.00}. I also was told over the phone on XX/XX/XXXX that my account was delinquent for about {$3000.00} and that the only way to fix it would be to request a forbearance, which would capitalize my interest again. I refused. I tried speaking with everyone possible before filing a complaint. I was eventually told that no one in FedLoans could fix the interest capitalization, and that around XX/XX/XXXX, they would report me to creditors for the delinquent account unless I agreed to a forbearance. I again refused for the reasons set forth below. I dont know what else I can do, but theyve totally XXXX everything up. Although Ive been assured since XX/XX/XXXX that they were taking care of it and fixing the many, many issues they caused, it sounds like they wont be able to or are refusing to fix it now. As best I can piece it together, the story is as follows : About XX/XX/XXXX, I uploaded my income information and attempted to upload my recertification form dated XX/XX/XXXX separately to the FedLoans Website. The income information uploaded, but the recertification form did not. I found out the form did not upload when I called and spoke with my lender on XX/XX/XXXX to confirm receipt after getting a letter the same date denying recertification. The letter said my recertification was denied because we did not receive all required pages of your form. I was told over the phone that the number of pages in the form were too large to upload using the Website and I only should have uploaded the first 4 pages ( everything before the small print/legal notice parts ). About XX/XX/XXXX, I uploaded only the first 4 pages of the XXXX recertification form again with my income information. The first page of the recertification form has, as question number 1, the following question : " select the reason you are submitting this form ( check only one ). '' There are four boxes. As you can see from the attached documentation, I had checked the box that says " I am submitting documentation for the annual recertification of income-driven repayment - - Skip to Item 5. '' About XXXX XXXX XXXX, I received another denial letter from FedLoans. The denial letter said I did not provide answers to income questions in Section 4 of the form, which is technically true but irrelevant since I did not fill out Section 4 because I skipped to Item 5 as instructed. I did not keep a record of my phone calls to FedLoans, but there have been about a dozen starting from about XX/XX/XXXX until about last week. I recall calling FedLoans when I received the XX/XX/XXXX denial letter. I was told someone would look into it, but that I should re-upload my income information just in case. I uploaded a more recent paystub XX/XX/XXXX. 
I received another denial on XX/XX/XXXX dated XX/XX/XXXX ( correspondence from FedLoans are received the day after they date them for all documents attached to this complaint ). This second XX/XX/XXXX denial letter said the same thing as the first one. I believe at some point that day or the following day, I called my lender and someone told me I needed to submit a new recertification form since they couldnt explain what was going on with the account. They walked me through how to check exactly the right boxes on the form so that it would be approved and not denied again. I followed their instructions and submitted a new form about XX/XX/XXXX ( notwithstanding the correctly filled out prior form ( s ) that were both denied ). I again checked the box that says " I am submitting documentation for the annual recertification of income-driven repayment - - Skip to Item 5. '' The person I spoke with over the phone also told me to fill out Sections of the form before Section 5, including Section 4, so I did. I did not upload my income verification again ( since I had already done so twice or possibly three times by this point ). About XX/XX/XXXX, I received a denial letter that said FedLoans had reviewed my income driven repayment plan request and denied it because they were not able to determine my annual income because the documentation I provided does n't clearly indicate the frequency of my pay. The paystubs I already submitted ( twice or thrice ) show both the frequency of pay ( bi-monthly ) & my annual pay. Im sure I called about this, too, but I can not recall what I was told ( I think they told me they saw the income information in there and werent sure why I was denied during this phone call? ) About XXXX XXXX XXXX, I received a letter that said FedLoans had not received my annual documentation and my loan payment would go up to {$3000.00} ( but I would remain in Income Based Repayment ). About XX/XX/XXXX, I received a letter that said my repayment schedule was changing and telling me that as a result about {$470.00} in interest would capitalize on my accounts. I also received XX/XX/XXXX a notice of forbearance and a letter saying FedLoans had received a request to remove my loans from IBR and put them into another plan. This letter said that " in order to complete your repayment plan change, you are required to make a payment under the standard repayment plan. I do n't recall reading the letter ( s ) until later on, but I called FedLoans no later than XX/XX/XXXX. I called because I logged in to pay my monthly payment for XX/XX/XXXX ( my monthly payments had previously been due the XXXX of each month ), and my head nearly exploded. My monthly payment for XX/XX/XXXX was over {$3000.00}. It had previously been about {$750.00}. I had already submitted a few recertification forms by this point and multiple paystubs. I had talked with numerous representatives who couldnt quite explain what was going on with my loan recertification process, but assured me everything was getting fixed. That clearly did not happen because my repayment amount quadrupled in one month. When I called this time, I was told I should submit my tax return ( by this point I had paid my taxes for XXXX ) along with a letter explaining my problems, and a new recertification form. I again asked for help filling out the form so they would not reject me for reasons inconsistent with the form itself, and I filled it out as instructed and submitted the new form and my tax return about XX/XX/XXXX. I was told on this new application that I needed to fill out the box in Section 1 that says " I want to enter an income-driven plan -- Continue to Item 2. '' The person I spoke with told me it looked like I had been removed from IDR in their system and put on standard repayment, but that it would be fixed with this new certification form. On XX/XX/XXXX, I received a letter saying FedLoans had received my request for an Income Driven Repayment Plan and my payments would be restored to an amount near where they had been before this debacle started. When I logged on to pay my XX/XX/XXXX bill, it was still over {$3000.00}. I called again. I asked what to do about the payment, since I couldnt pay over {$3000.00} and I received a letter recently saying they finally fixed everything. I was told not to worry about it, that they were processing the recalculation and fixing it and everything would get resolved when they finished processing my recertification. I left it alone until about XX/XX/XXXX, when I logged on to pay my XX/XX/XXXX bill and it was now over {$4000.00}. I called again. I was told they did n't know why my bill was so high, but they would fix it. They said they could see all the issues with my account in the system, but they had to submit an override to another department. I was again told everything would be fine once that process completed. I was again told that the payment amount due for XX/XX/XXXX was incorrect, and that I shouldnt worry about it until they correct it on their end -- they did n't even know what amount I should eventually be paying since everything was still being processed. I left it alone again until XX/XX/XXXX. In XX/XX/XXXX my bill was down to {$2000.00} ( but still not correct, obviously ). I called the first week or so of XX/XX/XXXX to complain again. This time, I spoke with a manager that told me she saw the override in the system, but that those can take a while to process. I explained I had been told not to make payments for XX/XX/XXXX or XX/XX/XXXX, and that not paying my loans each month was causing my financial harm since I am on a repayment assistance plan with my school that requires me to make monthly payments. I explained that every month FedLoans has me in limbo it affects my repayment assistance from my school -- years from now I wont be receiving months of assistance because while FedLoans has me in limbo, my schools repayment calculator keeps ticking away each month. She told me that the new payment amount was still being processed, but that she could see it was {$700.00}. I asked what I should do if by XX/XX/XXXX, the amount due for my bill had not been corrected. She assured me that she would track it, and she would make sure everything was corrected by XX/XX/XXXX. She would call me if there were any issues. On XX/XX/XXXX, I called FedLoans again because the amount due still had not been fixed and was far greater than {$700.00} IDR. This time I was told to just pay {$700.00}, and that I shouldnt worry about the remainder of the balance still showing on the Website after payment. I logged on and paid it as instructed. Last week, on XX/XX/XXXX, I received a letter saying my XX/XX/XXXX payment was late and my account was in delinquency status. I called on XX/XX/XXXX. This time I was on the phone with FedLoans for over 3 hours ( mostly on hold while they tried to figure out what theyd done to my account ). At the beginning of the phone conversation, I logged into my account just to be sure that my XX/XX/XXXX payment was processed on time. It was processed XX/XX/XXXX. I had to click through a few submenus to get to the history of my payments to find that information. As I clicked through I discovered -- FOR THE FIRST TIME -- that FedLoans had capitalized the interest on my account on XX/XX/XXXX ( to the tune of {$39000.00} ) and again in XX/XX/XXXX ( to the tune of an additional {$2900.00} ). I never received any notice my interest would capitalize in those amounts either before, during or after it happened. I found out on accident, while attempting to figure out whether my payment for XX/XX/XXXX was processed on time ( in order to figure out why I was receiving a threatening late payment/delinquency notice ). During those same time periods, representatives had been apologizing to me over the phone and promising to fix the errors on my account, guaranteeing that everything would be resolved. I was told a number of different things during the XX/XX/XXXX conversation with FedLoans. For one, by that point, I had already made my XX/XX/XXXX monthly payment ( on XX/XX/XXXX ). My balance still said over {$2000.00} on the Web site, but I went ahead and paid the {$700.00} like I did for XX/XX/XXXX based on the phone assurances from Fed Loans that I could just keep making the correct payments despite the balance showing differently. I wanted to be sure that they werent going to send me another delinquency notice for XX/XX/XXXX since Id already paid, so I asked whether I would be getting another delinquency notice or whether the XX/XX/XXXX one was generated for a different reason. The representative said she saw two payments for XX/XX/XXXX, that XX/XX/XXXXwas still showing delinquent, and that they had not received anything for XXXX. I explained that my payment XX/XX/XXXX was for XX/XX/XXXX. She said she did not realize that and would make sure to make a note attributing it to XX/XX/XXXX in my account ( I do not yet know if she actually did that or whether I will receive another threatening letter ). I was also told, by three different representatives ( two of them managers ) several different reasons why my interest capitalized in XX/XX/XXXX. The first explanation was because they had received my recertification request late. I told them that the XX/XX/XXXX notice said to submit recertification within 10 days of XX/XX/XXXX. I explained I uploaded my recertification form on XX/XX/XXXX and again on XX/XX/XXXX, and asked how that could possibly be late, especially considering our phone conversations at the time. I asked whether it was still late, since they still hadnt resolved all the issues with my account. I also asked why someone didnt mention it back then or in XX/XX/XXXX or in XX/XX/XXXX, XX/XX/XXXX or XX/XX/XXXX, and asked which recertification form was late because that explanation did not make sense. The representative agreed, but put me on hold, then transferred to a manager. The manager started with the same explanation and put me on hold when I asked similar questions. She came back and told me that the reason the interest capitalized was actually because of the XX/XX/XXXX recertification form. She said that I checked the box for recertification in Section 1, but I also filled out Sections 2 through 4, so there was a conflict. I explained that I filled it out the way I did based on directions from a FedLoans representative since my prior forms were denied for seemingly irrelevant reasons. She said that because there was a conflict, they processed the request as a request to remove me from IDR and put me into a different repayment plan, PAYE. I asked how that happened. She said that one of the boxes I checked in Section 2 meant that I actually did not request annual recertification. That box she mentioned says : ( recommended ) I want the Income Driven Repayment Plan with the lowest monthly payment. I asked why, if there was a conflict between whether I wanted to recertify annually ( since I also checked that box on the XX/XX/XXXX Recertification Form and since that box says " skip to Section 5 '' ) didnt anyone ever mention that to me before in any of my many phone conversations with FedLoans. I also asked why, if they couldnt figure out what I wanted based on that conflict ( or the by then copious notes undoubtedly in my account ) why didnt anyone call me and ask what I wanted? I also asked why the conflict meant they had to remove me from IDR instead of treating me as recertifying ( since they should have skipped to Item 5, too if they were reviewing the Form ). She didnt answer. She transferred me to another manager after telling me she couldnt do anything about the interest capitalization.
This final manager effectively said that he could do nothing to help me about the interest capitalization even if it was FedLoans fault. He said all I could do was write a letter to Fedloans and gave me a XXXX XXXX address. He also told me that my account was delinquent because I should have made a {$3000.00} or so payment in XXXX. He could not help me with the delinquency, either, even though FedLoans removed me from IDR incorrectly without telling me. He said I could either pay the delinquent balance or request a forbearance that would capitalize my interest again. I refused to do either. I was actually kind of offended. I asked why no one suggested I should make payments of any kind while they were processing my recertification in XX/XX/XXXX and XX/XX/XXXX if I actually did have a {$3000.00} balance on my account. He didnt really respond other than to tell me I could request a forbearance or they would ultimately be referring me to creditors. He said that would happen around XX/XX/XXXX so I had time to think about it. I told him he should use how badly they 've XXXX me as a training lesson for representatives because this entire thing has been terrible. He said they definitely would be reviewing it. On XX/XX/XXXX, I received a notice from FedLoans about a forbearance being applied to my account. As I noted above, I repeatedly refused any forbearance being applied to my account during the phone call the day before, and I have never requested one in the past. I have no idea where it came from. I can not tell, but the forbearance may have rectified the delinquency in my account. I have received no such notice or confirmation, but when I logged in to check my XX/XX/XXXX balance and download documents in preparation for this complaint, my balance for XX/XX/XXXX was {$0.00} based on my XX/XX/XXXX payment of {$700.00}. Sorry for the length of my complaint. Sorry for any typos/poor sentences as I typed it as quickly as possible. If theres anywhere else you suggest I call for advice/guidance, any other agencies or anything like that, please let me know. This really sucks.