Consumer complaint received 2023-07-24
Product: Debt collection — Private student loan debt
Issue: False statements or representation — Attempted to collect wrong amount
Company: AES/PHEAA (PA)

In XXXX, I owed PHEAA {$4900.00} in unfulfilled servitude for tuition reimbursement. I signed a specific tuition contract indicating the terms and conditions of how it could be paid. I was told that I had to pay in full via check or money order, or PHEAA would force take my last paycheck and leave, and then contact my pension administration for the remaining balance to be pulled from my contributions. I was told that I could NOT set up a payment plan. I was forced to let PHEAA operate on their own terms. I was led to believe that the withdrawal from my retirement account was a one and done deal. I was led to believe it was only going to withdraw from my own contributions. I had a deferred comp plan set aside where I contributed more than I had to, but that side of my account was ignored, and my state pension targeted. PHEAA was ignorant in collecting this debt ( does not understand retirement rules ), which financially hurts me today. It would have worsened up to retirement age had I not discovered it now. 

Background : PHEAA wrote a letter XX/XX/XXXX to my pension administration asking for payment. It was denied at first for me being an active employee, and I had no idea that PHEAA wasnt paid immediately. Per conversation with my pension admin in XXXX XXXX, PHEAA was informed that they'd have to wait until I was no longer an active employee to get payment ( I had transferred to another state agency, so I was still considered an active state employee ). I was later recruited by the private sector in XX/XX/XXXX, and I left active state service; which is when I received autogenerated letters from my pension administration ; one of the letters indicated that a 20 % federal withholding tax was applied. This 20 % tax was a shock, as PHEAA never bothered to put it into the terms and conditions of the contract or tell me about it. The amount then came to {$6100.00}, that I had to report as earned income. I thought that was the end of it. It was not. 

In XX/XX/XXXX, I came back to the state w/ the first full time job I could get in order to fulfill a couple remaining years for XXXX and because I had a pension that would allow me to retire comfortably. I ended up at my pension admins sister agency, a retirement agency similar to my own admins agency. I learned that when people go to retire, theyll see a {$50000.00} debt and be shocked, thats because debt accrues interest. It triggered me to check on the PHEAA debt. 

In XX/XX/XXXX through conversation with my pension admin, I learned that the PHEAA debt became a loan, growing XXXX  % annual interest every single year. Again, this came as a shock because it was not defined in the terms and conditions of the contract I signed with PHEAA, nor discussed in my exit interview. 

My pension admin told me I could do a Purchase of Service payment plan to start satisfying the debt now. They also told me that I could have done a payment plan back in XXXX through XX/XX/XXXX while I was an active state employee back then. This all came as a shock, because PHEAA told me I could not set up a payment plan. 
Whats baffling is that if PHEAA needed payment immediately in XX/XX/XXXX, then why were they so willing to wait to get paid until I was no longer an active employee? Why was I not sent communications while active? Why was I not told I could set up a payment plan back then? 

In disputing this debt with PHEAA, they deny any communications with XXXX regarding the retirement rules, that a withdrawal can not be made on an active state employee and that s/he absolutely can set up a payment plan while active ; and that the withdrawal becomes a loan that can only be paid off while an active employee, or upon refunding or retiring. PHEAA has done these types of withdrawals on other former employees as well ; so how is it that they dont know the retirement rules? 

The point is, PHEAA mislead me into thinking I could not set up a payment plan; led me to believe they were applying a simple withdrawal from my retirement account, but the truth is that they forced an ever-growing loan on my pension. The amount I'm now paying will be {$8100.00} over the course of a XXXX payment term. 

Currently, I am being ignored by PHEAA 's HR who will not answer any more of my questions and refuses to negotiate with me. They continue to tell me that the debt has been satisfied with them, and to take it up with my pension admin. However, PHEAA is who created the debt on my pension in the first place and denied me a payment plan. This matter could end up in a public hearing if not resolved now. I last spoke with an HR member from PHEAA, who told me she is no longer speaking to me about the matter. I was recently provided with the communications she made with my pension admin. She led my pension admin to believe that I just ran from a debt, which is not true. The truth is that she would not let me satisfy the debt any other way than to take from my pension.