Consumer complaint received 2018-06-10
Product: Student loan — Federal student loan servicing
Issue: Struggling to repay your loan — Can't temporarily delay making payments
Company: AES/PHEAA (TX)

I briefly attended XXXX XXXX XXXX XXXX XXXXXXXX XXXX for part of XX/XX/XXXX and part of XX/XX/XXXX. Currently I have a total outstanding balance of just under {$29000.00} that consists of a combination of 7 Federal Stafford Loans ( both subsidized and un-subsidized ). The loans were originally through XXXX XXXX. Soon after I began attending I suffered a personal medical crisis and had begun failing or withdrawing from classes. During that time, I lost my job, and home, moved XXXX miles away to stay with friends temporarily. As my first loans were about to enter repayment, the school relentlessly contacted me to re-enroll. I had just started working again, but still did not have a permanent address. While the school was trying to entice me to re-enroll, they stated that re-enrolling would prevent my loans from entering repayment. Knowing I was not going to be able to make the payments, I re-enrolled, which meant taking out more loans. Still not having a stable income or residence, including no consistent access to an internet connection ( required to attend online ), I failed to complete or was withdrawn from classes and from the school completely. 

When the loans went into repayment, I did not receive any notices. They were eventually in default. At some point in late XX/XX/XXXX I was contacted by a collection company regarding rehabilitation of my loans. At that point, I had a stable job and residence. I completed the rehabilitation program and started making payments. 

The loans were apparently transferred to XXXX XXXX in XX/XX/XXXX. In XX/XX/XXXX I lost my job and contacted them regarding not being able to make payments. The loans were placed in forbearance for 6 months due to being unemployed. I was still unemployed at the end of the initial period and requested the forbearance continue which was approved. 

After nearly a year of unemployment I did return to work, however, my income was considerably less. I was still unable to afford the monthly payments and have been requesting to postpone making payments. 

Due to the deceptive and misleading financial and recruiting practices of the school, as well as the certification of Federal loans in excess of the annual loan limit, and without making satisfactory academic progress I had also been preparing an application for Borrower Defense to Loan Repayment. 
Forbearance was ending and payment of {$280.00} was due XX/XX/XXXX. Although I am employed and technically a full time employee, my pay rate has decreased over the last 8 months, and I do not consistently receive a full 40 hours per week. 

On XX/XX/XXXX I once again requested forbearance while preparing the BDTR, I requested from XX/XX/XXXX-XX/XX/XXXX due to financial hardship. On XX/XX/XXXX, I received a notice that I had been approved for General Forbearance. However I was a little shocked to see the time period approved was XXXX. On XX/XX/XXXX I received an interest notice stating interest in the amount of {$9000.00} would be capitalized at the end of my current status ( forbearance ). On XX/XX/XXXX I received a billing statement with a payment due XX/XX/XXXX for {$280.00}. The same payment I couldn't afford the previous month when I requested to postpone my payments, I was still not able to afford. 

I filed the completed BDTR with supporting documentation online through the Department of Education 's electronic application and submission website on XX/XX/XXXX and requested the loans be placed in administrative forbearance pending review of the application. 

On XX/XX/XXXX I received a notice of new repayment terms, with increased monthly payments for each loan. On XX/XX/XXXX I received another billing statement showing I had a past due amount of {$280.00} and a current amount due of {$360.00} for a total of {$650.00} due XX/XX/XXXX. 

My financial situation that made me unable to afford a {$280.00} payment on XX/XX/XXXX certainly had not changed in 19 days while the loans were placed in forbearance leaving me equally unable to afford a {$280.00} payment on XX/XX/XXXX, and most definitely unable to afford a new monthly payment of {$360.00} ( or {$650.00} ). 

I attempted to request to postpone payments again through the XXXX XXXX eligibility screening tool on the website for both economic hardship deferment and student loan debt burden forbearance. Both options state I am ineligible. All calculations are based on gross income or adjusted gross income with no regard for actual pay and any other expenses. As I previously mentioned, although I am technically considered a full time employee, we do not consistently get 40 hour per week. For the first 5 months of this year, my monthly average take home pay has been {$1500.00}, out of that I have to pay rent ( $ XXXX/month ), car payment ( $ XXXX/mo so I can continue to go to work ), and that leaves {$120.00} to pay utilities, insurance, and eat. 

Since the forbearance request that was approved was only for 19 days, and the new monthly payment is nearly {$100.00} more per month than the payment I already couldn't afford, the loans have become delinquent. It has been 4 months since I submitted the BDTR application on which I requested the loans be placed in forbearance while it is reviewed.

Since they have still not been placed in forbearance, and I continue to not be able to afford to make the monthly payment I did not want the loans to go from delinquent to default and result in significant damage to my credit that I have been working to repair since initially defaulting on the loans. To try to avoid any adverse action and damage to my credit, on XX/XX/XXXX I explored my IDR options. Because my loans are FFEL loans I had to first consolidate them to apply for most of them. On XX/XX/XXXX I submitted an application for a direct consolidation loan to consolidate all 7 loans and requested the PAYE IDR plan and submitted the required supporting documentation. 

On XX/XX/XXXX and XX/XX/XXXX I received notifications that my request had been received, one also  requested I update my address, which I did, the other stated the consolidation was in process. On XX/XX/XXXX, the very thing I was trying to avoid by taking these extra steps while still awaiting my loans to be placed in administrative forbearance pending the outcome of the BDTR application, happened. 

On XX/XX/XXXX, while I am awaiting my loan servicing company to process my application for consolidation and a more affordable payment option while I wait for them to follow through on placing my loans in forbearance while assert my rights against the predatory lending and recruiting practices of a for profit institution, that same loan servicing company reported all 7 loans as 90 days past due to the credit bureau. The result of that action, was a 70 point drop in my credit score, and the first report of a missed payment since my financial hardship began with the loss of my job in XX/XX/XXXX.