Consumer complaint received 2017-07-28
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: AES/PHEAA (MI)

I have 2 major complaints : 1. FedLoan Servicing has been extremely unhelpful and unwilling to communicate with me about deadlines, re-certification processes, and times when they decide to charge me interest capitalization. 2. FedLoan Servicing is suspiciously and illegally handling my payments toward interest and not my principal balance. I started paying on my federal student loans on XX/XX/XXXX. I made every payment on time for the full year I was on the ICP plan/IBP plans. Then I was " informed '' within the websites portal in a hidden message center that I needed to re-certify my ICP/IBR plans. No e-mail, no phone call, nothing! By the time I saw my payment magically go up it was too late, I was now locked into a higher payment plan and got charged with a " interest capitalization '' fee. I also got a capitalized interest fee for missing this window and when I re-certified for another ICP/IBR plan. ( Interest on top of interest, on top of more interest! ) This completely wiped out any progress that I had made and it was now even harder to make payments. From XX/XX/XXXX to XX/XX/XXXX I made consistent, even increasing payments, on-time! Then I get nailed with another interest capitalization fee because I 'forgot ' after being responsible for 2 years to re-certify and never getting reminded by fedloans servicing! I got hit with two interest capitalization fees again and the 2nd fee was 5x higher than the first fee even though I made a large payment inbetween these fees to pay off all of the interest, it 's insanity! Now, I am back to making regular payments and getting no where. I have NEVER missed a payment and that is exactly how my credit history is, no missed payments EVER in over 10 years of credit and yet I am treated like this.
The 2nd complaint, which I briefly mentioned in the previous section, is that Fedloan Servicing is not handling my payments correctly. They are not paying off principal and are forcing me to pay interest as much as they can. For instance, from XX/XX/XXXX to XX/XX/XXXX I made consistent, on-time payments of {$240.00} except for one month where I paid {$230.00}. During that time, I only paid {$320.00} on principle and paid {$2300.00} in interest!!! The weird thing is that once I started paying on principle on XX/XX/XXXX, you would think that I would slowly start paying more on the principle, but no it would randomly fluctuate! I would pay more on principle, then less, then more, then less. That just does n't make sense, something weird and illegal is going on. Please help me, there is no way that I can pay this off anytime soon unless I start making another {$50000.00} a year or hit the lottery. Plus, I am a responsible person who has a good job and is making constant payments on time, and I still ca n't pay it off. There is something seriously wrong with this picture! Get this, after 3 years and 8 months of " paying '' on my student loan of {$40000.00} I have made zero progress on my loan. In fact, it has gone up in cost by a couple hundred dollars!!! > : o