Consumer complaint received 2022-04-23
Product: Student loan — Federal student loan servicing
Issue: Struggling to repay your loan — Problem lowering your monthly payments
Company: NEW YORK STATE HIGHER EDUCATION SERVICES CORPORATION (HESC)— (CO)

XXXX XXXX XXXX XXXX XXXX XXXX XXXX, CO XXXX XXXX XXXX mobile voice/ text XX/XX/XXXX Consumer Financial Protection Bureau XXXX XXXX XXXX XXXX Washington DC XXXX XXXX XXXX XXXX To Whom It May Concern : I am attempting to dispute the balance of my Federal Direct Student Loan. I also request total loan forgiveness. The existence of this loan balance is creating a hardship that makes it impossible for me to live. After several attempts, I have been unable to acquire documentation of the loan origination document. I have attempted to obtain this documentation from the US Department of Education XXXX XXXX XXXX XXXX XXXX XXXX and from the New York State Higher Education Services Corporation. In XXXX, I obtained this loan through New York State Higher Education ( NYSHE ). Although these organizations have provided some documentation, neither one has actual records of the loan origination documents or a complete loan repayment history. I requested both organizations to provide me with copies of the loan origination documents ( that were executed by my signature in XXXX and XXXX respectively ) and a complete loan repayment history from XXXX to date, however both organizations indicated that these documents no longer exist. 

Unfortunately, I, myself, no longer possess my personal copies of these documents. After my divorced was finalized, I had moved out of state ( Colorado ) in XXXX, and had placed my personal possessions ( including my file cabinets ) in storage in Colorado. All were lost because of a fire at the storage unit that occurred some time in XXXX or XXXX. Also lost were cancelled checks that included my student loan payments through XXXX. 

In the beginning, there were XXXX loans, XXXX in the amount of {$5000.00} to pay for tuition for my first year of graduate school at the University XXXX XXXX XXXX XXXX XXXX XXXX XXXX, and a second loan in the amount of {$6000.00} to pay for tuition for the second and final year of graduate school. The total amount borrowed was {$11000.00}. Unfortunately, not only have I lost my copies of documentation of these loan originations, it appears that New York State Higher Education ( NYSHE ) no longer has access to these records as well, ( even though this loan was originated by New York State Higher Education ( NYSHE ) ) nor does the US Department of Education ( Federal Student Loans ) have records of these early documents. 

I have requested and received some documentation from these organizations- each claims that they have sent all the documentation they have- but this documentation is woefully incomplete and comes nowhere close to documenting the actual loan origination history and full loan repayment history. I have scanned and attached each and every document I have received and have attached these documents to this letter. 

With respect to my loan repayment history, between XXXX and XXXX, I had arranged for the payroll department of my employer, XXXX XXXX ( part of which became XXXX XXXX XXXX after a spin-off that included the division in which I worked ), to withhold money from my payroll check and mail student loan payments on my behalf. They agreed, and did so as requested. At the time my employment was terminated in XX/XX/XXXX ( due to a massive reduction in force ( RIF ) ), my NDSL balance was approximately {$1000.00}. I had calculated that had I remained employed through XX/XX/XXXX, my student load balance would have been paid off in full had I maintained the loan repayment schedule that was in place during the first half of XXXX. 

After I left XXXX, I was unable to find suitable employment and wound up getting temporary jobs that didnt pay anywhere close to the salary I made at XXXX XXXX I could no longer afford to make student loan payments and struggled to pay my basic living expenses. My loan fell into default status. 

According to New York Higher Education Services Corp ( document attached ), as of XX/XX/XXXX, my loan balance amount was XXXX and as of XX/XX/XXXX, it was $ XXXX more than {$4000.00} higher. 

According to the US Department of Education XXXX XXXX XXXX XXXX XXXX XXXX, I entered into a promissory note for a Federal Direct Consolidation Loan on XX/XX/XXXX ( documentation attached ) although I dont know what the alleged loan balance was at that time. 

US Department of Education XXXX XXXX XXXX XXXX XXXX XXXX further indicated that there was a principal loan balance of {$53000.00}, an interest rate of 8.2 %, an interest amount of {$20000.00} and a collection charge of {$13000.00} for a total balance of {$87000.00} but its not clear to me, in the documentation provided, ( and attached to this letter ) what the effective date was for these numbers. One document the US Department of Education XXXX XXXX XXXX XXXX XXXX XXXX provided to me indicated that my student loan balance was {$78000.00}. 

The US Department of Education XXXX XXXX XXXX XXXX XXXX XXXX indicated that from XX/XX/XXXX through XX/XX/XXXX I paid XXXX ( through a garnishment of my monthly Social Security XXXX check ). XXXX years ago, I received a XXXX XXXX XXXX refund check in the amount of {$160.00} dated XX/XX/XXXX, so the total payments made from XX/XX/XXXX through XX/XX/XXXX was {$4600.00}. 

None of these payments were applied to principal reduction. 

Presently, due to the moratorium placed on student loan collection by the XXXX administration, no payments have been made since XX/XX/XXXX. It is my understanding that it is unlawful for the Department of Education to incur additional interest, fees, or penalties from XX/XX/XXXX to now. 

I simply dont understand how my principal balance of ~ {$1000.00} in XXXX could have ballooned to over {$78000.00} ( or {$87000.00} ) as of XXXX! And the documentation I have received to date does not show how this happened. 

Therefore, I dispute that {$78000.00} ( or {$87000.00}, for that matter ) is a legitimate balance. 

I think its reasonable to dismiss this loan balance at this time insofar as during the life of the loan I have paid significantly more than XXXX or XXXX times the original principal amount of this loan. With the exception of this loan, my credit history is excellent, however, because of the existence of this loan on my credit report, I have been unable to get a mortgage on a house ever since I quit claimed my last house to my ex-wife as part of our divorce settlement in XXXX. XXXX is enough! I have included my XXXX XXXX XXXX for XXXX XXXX to document my current income. 

The XXXX administration established a moratorium on student loan repayment effective around XX/XX/XXXX and required lenders to cease and desist reporting student loan status to credit bureaus. Since that time, my XXXX credit score has risen from the mid to upper XXXX to the over XXXX between XX/XX/XXXX and now. I am attempting to purchase a modest house now. I have informed my lender that I would like to pay {$15000.00} down ( 30 % ) on a total purchase amount of {$50000.00} ( the mortgage loan would be {$35000.00} ). About a month ago, my lender gave me a verified approval of {$75000.00} for a mortgage loan on a house with a purchase price of {$100000.00}. Today I was informed that because the loan amount of the house I want to buy is below {$50000.00}, I am ineligible for a conventional loan. My only option is to apply for an FHA loan. Even though my student loan no longer appears on my credit report, the record of default is visible to the FHA lender. This means I can not be approved for an FHA loan, which would give me a mortgage payment of {$200.00} ( PI ) per month, if approved. Monthly rent would cost me {$600.00} to {$700.00} at the least in the city where the house I want to buy is located. 

Over the course of history of this loan, various other companies have attempted to collect this debt. XXXX was XXXX, XXXX was another. I think there have been others but I cant remember their names nor do I have any contact information. It appears that there is no central database that contains all of this information and it appears that the entire payment history for the life of the loan is unavailable. For example, the representative with whom I spoke at US Department of Education XXXX XXXX XXXX XXXX XXXX XXXX told me that I have not made any payments during the life of the loan. This is entirely untrue. Such a statement evidences the incompleteness of their records. 

I have requested ( by phone ) to negotiate an abatement of this loan amount ( essentially by reducing the amount of interest, penalties and fees owed ) to both the New York State Higher Education Services Corporation and the US Department of Education XXXX XXXX XXXX XXXX XXXX XXXX. NYSHE Services Corp told me that the matter is out of their hands and must be handled by the US Department of Education XXXX XXXX XXXX XXXX XXXX XXXX. The representative at the XXXX Department of Education XXXX XXXX XXXX XXXX XXXX XXXX with whom I spoke told me that no abatement or special arrangements can be made. He actually told me that the loan origination date was XX/XX/XXXX! That is utter nonsense! He told me that all the charges are legitimate and can not be contested, abated, or negotiated downward. He also told me that the amount of my current income is irrelevant. The representative told me that if repayment of this loan presents a hardship, my only recourse is to apply for loan forbearance. I have applied for loan forbearance in years past, and I think this is related to the astronomical amount of interest, fees and penalties that have accrued to my account over the life of the loan. Although the interest rate of 8.2 % is extremely high, I have been told that this amount can not be lowered. Now I am concerned that to apply for loan forbearance will only exacerbate the problem. What I would like is recognition for payments made over the course of this loan ( although it appears that a complete payment history no longer exists ) and I would like loan forgiveness. 

Thank you for helping me to arrive at a reasonable resolution of this matter. Again, I request total loan forgiveness. 

Sincerely, XXXX XXXX XXXX Summary of Attached Documents : ( next page, please ) Copy of this letter in pdf format Dispute US Dept of EducationXXXX XXXX US Dept of EducationXXXX XXXX XXXX US Dept of EducationXXXX XXXX XXXX US Dept of EducationXXXX XXXX XXXX XXXX XXXX XXXX  XXXX XXXX XXXX XXXX US Dept of Ed.XXXX  XXXX XXXX US Dept of Education XXXX XXXX XXXX XXXX XXXX XXXX XXXX Treasury XXXX XXXX XXXX XXXX XXXX US Dept of Treasury Student Loan XXXX XXXX XXXX US Dept of Treasury Student Loan Garnished XXXX XXXX US Dept of Treasury Student Loan Garnished Payment XXXX US Dept of Treasury Student Loan Garnished Payment XXXX XXXX XXXX XXXX Treasury Student Loan Garnished Payment XXXX XXXX XXXX XXXX Treasury XXXX Loan Garnished Payment XXXX XXXX XXXX XXXX Treasury XXXX XXXX Garnished Payment XXXX XXXX XXXX of Treasury XXXX XXXX XXXX Payment XXXX XXXX XXXX of Treasury XXXX XXXX XXXX XXXX XXXX XXXX XXXX of Treasury Student XXXX XXXX XXXX XXXX XXXX XXXX of Treasury Student Loan XXXX XXXX XXXX