Consumer complaint received 2019-01-09
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: AES/PHEAA (CA)

XXXX XXXX consolidated my student loans and disbursed funds without my express consent or authorization. 

I originally had six separate subsidized loans, two of which were at a 2.32 % interest rate, two at a 3.4 % rate, and two at a 6.8 % rate. I also had two unsubsidized loans, both at a 6.8 % interest rate. After the unauthorized consolidation, my account now shows that I have two loans, one subsidized and one unsubsidized, both of which have a 5.375 % interest rate. This significantly increased the interest rate on four of my loans and also significantly increased my monthly payment. 

XXXX XXXX called me and emailed me many times urging me to apply for a consolidation as they said it could help lower my monthly payment and/or interest rates. Their sales people were very pushy and, in hindsight, very deceptive. They kept telling me they wanted to help me and made it seem as if I was losing money by not applying. After years of being pressured by XXXX XXXX, I finally decided to submit an application to, in their words, see what kind of rates and monthly payment they would offer. '' I submit an application, but I did NOT have a chance to review their proposed terms before they disbursed the funds for the consolidation. I did NOT accept their terms, and I did NOT authorize a disbursement of funds. 

Standard industry practice dictates that the borrower applies for a loan, and then lender will either deny the application or propose terms for the loan. The borrower then has the choice whether or not to accept the terms and move forward with the disbursement. I had no choice in this case ; XXXX XXXX  automatically consolidated my loans and disbursed the funds without my knowledge, express consent, or authorization. 

It was not made expressly known, in any part of the application, that XXXX XXXX would automatically consolidate my loans and disburse funds without any confirmation from me, the borrower. I was lead to believe, by the application process, that I would have a chance to review their newly proposed terms and interest rates before I decided to accept or reject them. 

Once again, I did NOT have a chance to review the proposed terms, I did NOT accept the terms, and I did NOT authorize a disbursement of funds. 

I have called XXXX XXXX multiple times and have sent two letters trying to resolve this issue to no avail. They keep telling me that they are unable to reverse the consolidation and I have been given the run-around every time. I was very professional and cordial in my attempts to resolve this issue but many of the employees I spoke to, including supervisors and department heads, were extremely rude, unprofessional, and/or unresponsive to me. Some of them even hung up on me. 

I plan to fight this until the end, even if I have to take legal action, so any help the CFPB can offer will be greatly appreciated. I have submit a complaint to the XXXX and I also plan on contacting the media in an effort to help inform others who have been taken advantage of in the same way. This kind of practice is blatant fraud and extortion and it should not be allowed. 

Thank you very much for your time. I look forward to your help in resolving this matter.