Consumer complaint received 2023-02-13
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: AES/PHEAA (MD)

I am filing this complaint on behalf of my wife. She has spent countless hours trying to resolve this issue since XX/XX/XXXX and works at a facility during the day that doesn't allow her to make or receive calls to even attempt to resolve this. If a consent form is needed, I'm happy to provide. 

In XX/XX/XXXX, my wife 's remaining balance of her federal student loan was forgiven and XXXX  out through the PSLF waiver program. Her loan balance at the time of forgiveness was about {$25000.00}. The paperwork that she received from FedLoan Servicing in XX/XX/XXXX showed that about {$100000.00} was forgiven but when she received her overpayment refund check in XX/XX/XXXX, she was only provided about {$18000.00}. We were expecting about {$75000.00} ( the total amount forgiven minus the remaining balance ). Additional paperwork provided by FedLoan Servicing indicates that the 120th qualifying payment was received in XX/XX/XXXX and that we had made about 30 qualifying payments since then ( overpayments ), which, when going through the receipts, adds up to about {$75000.00}. When we followed-up with the Department of Education , they redirected us to OSLA ( her loan holder prior to it transferring to FedLoan Servicing for the PSLF waiver ) and they stated that only the standard principal and interest payments since XX/XX/XXXX qualified as overpayments and that any payments above that amount did not qualify ( in some months, we made payments substantially more than the standard amount in order to try to pay it off ASAP -- foregoing investing in our retirement, kid 's XXXX education plans or any much needed home repair and medical expenses ). That is in conflict with statements on the Student Aid website that state the following : -studentaid.gov : the amount forgiven will be the principal and interest that was due after you made your 120th qualifying payment. and Any payments made over 120 will be automatically refunded as long as those extra payments occurred after consolidation. '' XXXX XXXX XXXX - XXXX XXXX XXXX XXXX XXXX ( XXXX XXXX XXXX  ) states : ( d ) Forgiveness Amount. The Secretary forgives the **principal and accrued interest that remains on all eligible loans** for which loan forgiveness is requested by the borrower. The Secretary forgives this amount **after the borrower makes the 120 monthly qualifying payments** under paragraph ( c ) of this section. 

There should be no distinction in the type of overpayment made since the XXXX qualifying payment, only that " any payments made '' or any " principal and accrued interest that remains. '' We are now in limbo. We have a complaint that has been filed since early XX/XX/XXXX that was filed immediately after the wrong refund check amount was received. We have made several phone calls with the Department of Education and various loan servicers ( FedLoan and OSLA ) and receive conflicting information, including that once forgiveness is provided and the refund check submitted, that there is nothing that can be done -- especially given that FedLoan Servicing stopped handling as of XX/XX/XXXX. We have not cashed the {$18000.00} check and will hold until this is resolved. 

Note : my wife 's loan was not transferred to XXXX and FedLoan conveniently held the overpayment refund check until just before the mid XXXX contract termination ( remember, our forgiveness occurred in XXXX and it took FedLoan 5 months to process the overpayment refund! ).