Consumer complaint received 2019-05-29
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: AES/PHEAA (NY)

I have been repaying my law school loans, which are serviced through Fed Loan Servicing, since I graduated in XXXX. I have been on the income-based repayment plan the whole time. I'm a XXXX XXXX  in New York. Every year, I submit annual documentation to keep track of my 120 qualifying payments that I need for public service loan forgiveness. I also submit annually recertification paperwork for my income-driven repayment plan. In XX/XX/XXXX, I uploaded my IDR recertification paperwork to both XXXX  ( which services my XXXX loans ) and Fed Loan Servicing. Fed Loan told me it was too early, and that I would need to resubmit in XX/XX/XXXX. So I did - I resubmitted everything on XX/XX/XXXX, following the instructions perfectly as to the required documentation as I always do. 

I have never elected a paperless billing option for my student loans. Yesterday, I went to pay my student loan online ( which had been {$530.00} a month ) and saw that my monthly payment had ballooned to over {$1900.00} a month. I checked the website and got a confusing message where XXXX claimed they never received my annual IDR recertification paperwork, even though their website clearly demonstrated that I had submitted everything online on XX/XX/XXXX. 

I called FedLoan servicing and after being transferred 3 times ( total time on phone : 30 minutes ), I was told that FedLoan denied my IDR recertification, claiming they needed my spouse 's tax return. FedLoan told me they had sent me a letter on XX/XX/XXXX asking for this paperwork. I was told it was sent to me via paperless inbox and NOT in the mail. I checked my paperless inbox and saw a letter on XX/XX/XXXX that denied my request, asking for my spouse 's tax return, and claiming if they didn't get it within " a couple of days '' my loan payment would go up. 

I explained I never got this and that I never enrolled in paperless billing. I explained that I would upload my spouse 's most recent tax return immediately, and asked if FedLoan could immediately recalculate my payment to the correct IBR amount so that I could pay it. I was told no and given the option of either paying over {$1900.00} a month, or placing my account in forbearance until FedLoan recalculates my monthly payment. 

Placing my account into forbearance means that even if I pay what I *should* owe as my IBR monthly payment, this will not count toward my 120 qualifying payments needed for Public Service Loan forgiveness . It also means that the interest will capitalize during the period my loans are in forbearance due to no fault of my own. FedLoan constantly forces students into forbearance for often months at a time while it recalculates our IBR payments. It's a deliberate scam and is unconscionable - they are making it impossible for those of us in public service to make our 120 qualifying payments for loan forgiveness. 

I uploaded my husband 's most recent tax return yesterday, and today their website indicates I can expect a " follow-up email '' by XX/XX/XXXX. There is no reason why this should take this long, and they shouldn't be emailing me when I am not enrolled in paperless billing! 

In addition, because I am on IBR and my husband and I file our taxes separately, they *do not need my husband 's tax return* because IBR does not consider the income of a a borrower 's spouse in calculating the borrower 's monthly payment where both individuals file their taxes separately. 

The instructions in the annual IDR recertification form did not indicate that I needed to provide my spouse 's most recent tax return. FedLoan then waited six weeks to send a letter electronically to me ( instead of via mail as I request ) that I did not see until yesterday, only giving me " a couple of days '' to provide unnecessary paperwork.