Consumer complaint received 2017-05-04
Product: Student loan — Federal student loan servicing
Issue: Struggling to repay your loan — Can't get other flexible options for repaying your loan
Company: AES/PHEAA (CA)

I graduated   XXXX   XXXX   in  XX/XX/XXXX . Since then I have been working in public service jobs. I consolidated my loans and have been making payments under the Income-Based Repayment plan in order to qualify to the Public Service Loan Forgiveness Program ( PSLF ) after ten years. I have also annually submitted my Employment Certification Form to track my progress and ensure I am working for a qualifying employer.
In   XXXX   XXXX   I submitted my most recent Employer Certification Form. On   XXXX   XXXX   XXXX  , I received a response from FedLoan Servicing confirming my progress toward the 120 qualifying payments, and reaffirming that my current employment qualifies for the plan.
However, I was dismayed to see that the total number of qualifying payments credited to me in   XXXX   XXXX    ( 40 ) was  lower than the number of qualifying payments listed in   XXXX   XXXX    (  42  ).  Throughout the intervening year, I made twelve on-time monthly payments totaling {$5300.00}.
After carefully re-reviewing the eligibility requirements for PSLF, my sense is that the adjustment is a result of the following language in the online FAQs : However, if you do want to pay more than your required monthly payment amount, you should contact your servicer and ask that the extra amount not be applied to cover future payments. Otherwise, you may end up being paid ahead, and you cant receive credit for a qualifying PSLF payment during a month when no payment is due.
Until I became aware of this language, I was paying {$500.00} per month more than {$100.00} over my current required payment under the income-based repayment plan. I did this because the principal on my loans is over {$180000.00}, and the interest rate is 7.75 %. I would have to pay over {$1200.00} per month just to cover the monthly interest. While this is not feasible in my current financial circumstances, I hoped to at least pay a slightly greater proportion of the interest each month than required to prevent my overall balance from growing dramatically throughout the loan period. It has already accumulated {$22000.00} just in interest. However, I now realize that the current policy disincentivizes borrowers from paying more their minimum payment even during months when they are able to. This is counterintuitive for anyone who has had any other type of loan, where paying more than your minimum payment would be understood as prudent financial behavior.
Finally, I was very disappointed to see that the   XXXX    record of my qualifying payments for PSLF was no longer available through my online inbox on the FedLoan Servicing website. Fortunately, Id saved a copy, which allowed me to identify the discrepancy described above. The deletion of this statement from my account felt like an attempt to conceal the retroactive adjustment that took place.
Moving forward, I will pay only the minimum amount required to ensure that all my payments count as qualifying payments, or call my servicer in advance if I am in a position to pay more. However, it has been disheartening to see the total number of qualifying payments decrease even as Ive been diligent about making payments and in fact paid nearly {$2000.00} more than required during the   XXXX   period.
Moreover, for the benefit of other borrowers, I think it would be worth making the language excerpted above more transparent and accessible. I noticed that it was added to the    XXXX    letter I received about my total number of qualifying payments, though it was not included in the  XX/XX/XXXX  letter. I imagine there are many other borrowers in my position, including some who have not been submitting an Employment  Certification Form each year, and who thus may not realize that their monthly payments have not counted until well into the ten-year PSLF period.
I sent a letter summarizing this experience, along with copies of all the documents referenced, to both FedLoan Servicing and The Office of Consumer Advocacy at the Pennsylvania Higher Education  Assistance Agency in   XXXX   XXXX   I have not yet received a respo  nse.