Consumer complaint received 2019-05-23
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: AES/PHEAA (CO)

As of XXXX of this year ( XXXX ) I was with FedLoan Servicing Student Loan   company because I was enrolled in XXXX. In that month, I found out I got a new job outside of public service. I had recently been notified by FedLoan that my IDR plan monthly amount was going to double, and the amount was going to be tough. Since I was no longer going to be in PSLF, I called FedLoan on XX/XX/XXXX to see what other payment options there were. I spoke with a man who told me about my options and I selected the Extended Graduated plan. He told me I was instantly approved for the new plan. At no point in our conversation did he tell me that by choosing a new plan I may be subject to a system-generated delinquency forbearance that came with the consequence of capitalizing ALL interest from the life of my loans. At the end of the call, I asked about the current payment due and noted it was a lot. He said no problem we can skip the month. I then heard typing and a minute or two later he said he had submitted a forbearance request for me. Now I understand the consequences of forbearance and I told him that was not what I wanted and requested that he cancel the application. He said he did and then I confirmed that the current charge for {$610.00} would be auto-debited on schedule ( XX/XX/XXXX ), and my new payment amount would start next month. He told me I was correct and we ended the call. A few weeks later I received a letter stating that $ 8,000+ interest was going to be capitalized to my principal balance. I called back before that was supposed to happen ( XX/XX/XXXX I believe was when I called ), and spoke to a woman. I explained the situation and that the forbearance must have not been correctly canceled by the last person. She pulled up my account and saw that the previous call notes stated that the forbearance should have been canceled. So she agreed that it was a mistake. I confirmed with her that the forbearance would be removed, and the interest would not capitalize. She verbally confirmed this was true and that the XXXX payment of about {$610.00} would be put on my account to pay. We ended the call. This last weekend I was reviewing my account as my monthly payment was upcoming. I noticed the monthly payment increased by about {$20.00}, the {$610.00} from XXXX was not on my bill and that all the interest had still been capitalized to my principle balance. I called back yesterday ( XX/XX/XXXX ) and spoke with a rep named XXXX and a supervisor named XXXX. When I first spoke with XXXX I explained my previous two calls and asked to get this fixed. She said she needed to put me on hold and look something up. She then got back on the phone and told me it was system-generated delinquency forbearance and there was nothing I could do about it. I asked to speak to a supervisor, which was XXXX. XXXX told me XXXX was correct and there was nothing I could do. I asked her what the companys responsibility is of informing me of this, and she said its in my MPN. I looked this up and I see that they are allowed to put me on forbearance in the event of changing a plan to keep my account current, but thats all it says. There is no information about my rights to know this or be specifically told I was being put on delinquency forbearance. So, my question is should they have informed that this was part of the process and should they have put in specific writing the forbearance I was on? I was not told until my third call that this was the case nor did I receive any written communication about this other than the interest notification that did not specifically note the reasons in my case ( it just listed possible reasons that the interest would be capitalizing ). I also have no written documentation that I was ever put on this delinquency forbearance. In my first call, I told the gentleman that I could pay XXXX and he confirmed my payment would then update for XXXX because I was auto-approved. So I verbally told them I would not be delinquent, and could pay. How is it legal for them to do this without any notification to me until after the fact when I called? What is their responsibility as a result of incorrect information I received twice? Honestly I would have never changed my payment plan if I knew the consequence was going to be {$8000.00} of capitalized interest, which really comes out to more like $ 30,000+ over the life of the loan. I changed my plan in hopes of being able to save for a home down payment and chose the graduated plan because I knew I just needed a lower payment for a couple years. If I made a mistake here, I would hold myself responsible but I believe I was misinformed and then intentionally not provided information until it was too late. Do I have any rights here? Please advise.