Consumer complaint received 2021-05-18
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: AES/PHEAA (CA)

I have numerous and complicated issues with my student loans from law school. Allow me to preface all of this by stating that I attended law school expressly to become a public interest lawyer, which is exactly what I've done. I attended law school from the fall of XXXX through the spring of XXXX, which incidentally left me graduating right in the midst of the financial crisis. Moreover, I find this situation both humiliating and debilitating. I feel like a fool that I actually thought student loans were designed to help students, which is why I wasnt as aggressive, and didnt clearly document everything, with regards to these loans. I feel like an XXXX and like I got scammed. Additionally, and this applies to student loans as a whole, the practice of requiring interest only payments up front for all student borrowers makes it impossible to reduce the debt. This does not occur in any other borrowing situation, and frankly makes it such that I mightve been better off paying for college with a credit card. I have paid nearly {$70000.00} towards my student loans and have barely touched the ( incorrect ) principal. 

My issues are as follows : 1 ) The principal amount borrowed for my student loan is incorrect ; 2 ) I was essentially strong-armed into a consolidation prior to graduation under the false pretense of securing a lower interest rate ( the rate was more than double ) ; and finally, 3 ) Upon graduating, I was under the impression that I re-consolidated into a federal direct loan eligible for public interest forgiveness, but I was not. The website for my loan indicated ( up until recently, now it doesn't indicate loan type at all ) that I had direct loans eligible for forgiveness. It was not until around XXXX, by going into the federal aid portal, that I discovered that I was in the wrong loan type. Had the website indicated that it was a FFEL loan initially, I could have reconsolidated into the correct direct loan right away and corrected the problem. 

My desired outcomes are as follows : 1 ) I would like my principal to be adjusted and corrected, and to be credited for overpayment of interest based on the erroneous principal ; 2 ) I would like my interest rate to be properly adjusted to the rate I was in prior to being fraudulently deceived into a consolidation, and to be credited for the overpayments of interest based on the coercively obtained interest rate ; and most importantly, 3 ) I would like to be placed in the proper XXXX interest forgiveness loan, with either my original interest rate, or a current competitive interest rate, and for my years of payments to be applied to that loan. 

According to the lenders website, the principal for my non-subsidized Stafford loan was {$56000.00} ( originally {$52000.00} ) and for my subsidized Stafford loan was {$49000.00} ( originally {$50000.00} ). Because I was fully under the impression that I was consolidated in a public interest loan that would be forgiven, I was less than diligent in examining the details of these totals, which I deeply regret. However, consistent with both the AES ( Lender ) website and the studentaid.gov website, approximately {$10000.00} has been added to the total of the amount disbursed, and thereby to my principal. i am using round numbers in my math, but according to the AES site, As of the date of the first consolidation, or XX/XX/XXXX, the total amount disbursed to me was about {$60000.00} ( {$33000.00} subsidized/ {$28000.00} unsubsidized ). Likewise for the studentaid.gov website. Not only is that amount consistent with the amounts disbursed up until and including the disbursement dated XX/XX/XXXX, but it was also the total of the first consolidation loan, which corroborates that amount. Subsequent to the first consolidation, there were two disbursements of subsidized and unsubsidized Stafford loans respectively. One disbursement on XX/XX/XXXX for a total of {$9000.00} and one on XX/XX/XXXX for {$15000.00}. The total for both of these disbursements is {$24000.00}. If you add {$24000.00} to the prior total ( whether reviewing disbursements or based on the total of the previous consolidation ), the total is {$84000.00}. There was an interest charged totaling {$1400.00}, bringing the grand total as of my final disbursement to : {$86000.00}. 

Somehow, in the course of the first consolidation, approximately {$10000.00} is erroneously and fraudulently added to the total, and thereby to my principal. There is no record of such disbursement, nor was there any need for a dispersement. Likewise, no such dispersement appears on the studentaid.gov website. As such, interest was accrued on the unsubsidized portion of that fraudulent addition to the principal, and ultimately, that additional money was also incorporated into the second consolidation in XX/XX/XXXX. According to the second consolidation, there were dispersals in the amounts of {$17000.00} subsidized and {$16000.00} unsubsidized. This is not correct and is not consistent with the records of dispersement. The only dispersals made after the first consolidation were dated XX/XX/XXXX for {$4200.00} subsidized and {$5000.00} unsubsidized and XX/XX/XXXX for {$8500.00} subsidized and {$6900.00} unsubsidized, again for a total of {$24000.00}. Those are the only dispersals indicated on all of my records, are the only disbursements I received. Thus, based on that blatant fraud, the total principal for my second consolidation loan is improperly and illegally inflated. I have been paying interest on a bogus principal for more than ten years ( not including deferrals ). I demand that this total be corrected, and I be credited for all overpayment of interest on the sham principal. 

With regard to the first consolidation, and the interest rates generally. As of the spring of XXXX, the interest rate on all of my loans was 2.43 %. In the summer of XXXX, I attended classes and worked at a XXXX in XXXX XXXX. The lender should have been well aware of this, as they were providing financial aid. While I was on another continent, with a twelve hour time difference, very spotty if any internet connectivity, and no phone availability, the lender and financial aid department contacted my family and duplicitously and coercively claimed that I just had to consolidate my student loans within the next 30 days to lock in the lowest interest rate possible. With very little information, and no ability to research, which the lender knew, I agreed. I was not graduating until the next year, so there was absolutely no need to consolidate at that time. Moreover, and most importantly, the interest rate for the first consolidation loan was 4.62 %, almost twice my previous rate. This is price gouging and snake oil salesmanship at its best. Total scam. And I, naively, still thought students loans were designed to be pro-student. I am so stupid. I feel like I consolidated with the proverbial XXXX XXXX. Moreover, despite the interest rates being at historic lows in the XX/XX/XXXX due to the financial crisis, and despite my excellent credit rating, the interest rate for my second consolidation loan was even higher at 5.62 %. This is an outrage. My interest rate for the duration of all of the loans should be adjusted to the rate it was at before the fraud was perpetrated : 2.43 %, and any overpayment should be credited towards the principal. 

Finally, as I mentioned previously, I entered law school with every intention of going into public interest. My friends from orientation can attest to that. By the summer of XXXX, I had accepted a public interest position starting in XX/XX/XXXX as a law clerk in the XXXX Common Pleas Court. This clerkship paid approximately $ XXXX/year. Pursuant to my initial goal, I have remained in public interest for the duration of my career, working at the Disciplinary Board in XXXX, the U.S. Department of Labor from XXXX through XXXX, and the USPS from XXXX until present. As such, I was fully under the impression that my second consolidation in XX/XX/XXXX ( right in the midst of the bar exam, I might add ) was into the Federal Direct Public Interest Forgiveness Loan. This was a newer option at the time, but I one hundred percent believed that I had properly consolidated into the proper loan. Due to my meager salary as a clerk, I had no choice but to defer my loans until the beginning of XXXX. When I logged into my borrowers account to request the deferral in XXXX, the website clearly indicated the loan type as DIR, or Federal Direct, the type of consolidation loan used for Public Interest Loan Forgiveness ( PILF ). Likewise, when I resumed making payments, the account summary page continued to state DIR for the loan type. Accordingly, I continued to believe that I was under the PILF, that my income based repayments were being directed toward the PILF and that my balance after 10 years of payments would be forgiven. Had the website indicated a different loan type, or even if it had not indicated any loan type, this would have prompted me to do extensive research, determine the loan type, and if it were found to be incorrect, I could have refinance into a PILF Loan at any time without having wasted time and/or money making payments that did not apply. How do I know thats what I would have done because in approximately early XXXX, as I thought I was nearing the time to start worrying about PILF paperwork and also was looking to purchase a home, I checked the lenders website, and it now didnt indicate anything for the loan type. It was only at this time and by researching on the studentaid.gov website that I determined that I was somehow NOT in the proper loan, and rather somehow ended up in a FFEL loan. And moreover, that the FFEL loan was not even transferred back to the Department of Education like other FFEL loans were due to massive fraud. Great. I was so despondent and defeated that Ive been basically able to face this problem until now. I literally get nauseous whenever I even think about this horrible situation and the despicable conduct of the lender. Plus, I feel embarrassed and stupid for thinking this process was in any way for my benefit. Of course I should have been in a public interest loan. The lender knew that I was working in public interest from day one. They also knew that I had to defer paying my loan due to my meager public interest salary, which is priestly the reason for the PILF. And the fact that they mislabeled the loan is just insult on top of injury. Yes, I was a stupid XXXX to have any faith or trust in my lender, but I didnt deserve to be deceived and shouldnt have had to foresee that. The lenders dishonest and unscrupulous actions prevented my ability to foresee or correct any errors. I should be place din the proper loan consolidation and the income based repayments Ive been making for years should absolutely be applied to that consolidation. 

In short, I was robbed when the lender tried to slip in an extra {$10000.00} into my principal and the the lender extorted additional interest based on that theft. Then I was coerced and conned into a higher interest rate. And finally, I was deceived and intentionally defrauded from my ability to have my loan properly forgiven. At this point, I have paid back all of the money I actually borrowed, especially if you account for the incorrect principal and rates. All I want is the treatment I thought I was getting from the start. Im not trying to get more than I deserve, although I wouldnt argue- considering. It is not impossible that there are causes of action with investigating with attorneys, or even as part of existing class action suits.