Consumer complaint received 2021-04-30
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: AES/PHEAA (TX)

I have a federal consolidated student loan that is serviced by Pennsylvania Higher Education Assistance Agency dba FedLoan Servicing. The loan was consolidated in XXXX, but FedLoan Servicing maintains the consolidated loan as two loan sequences : a subsidized student loan and an unsubsidized student loan. I have been an XXXX XXXX service member in the United States XXXXXXXX since XX/XX/XXXX. I have remained on XXXX XXXX at all times since XX/XX/XXXX. Since XX/XX/XXXX, I have never requested for my loans to be placed in forbearance. However, FedLoan Servicing has placed my loans into forbearance on numerous occasions to process their own paperwork and for their own benefit. They have even retroactively applied forbearances to my account several years later to correct their own billing errors when I was in active repayment during that time period and both the Department of Defense and I were making payments towards my student loans. Every year of my XXXX XXXX service, I have filed a yearly certification form to determine my payment amount under an income-based repayment plan. Since the start of my XXXX service, I have been enrolled in an income-driven repayment plan. I am in the Revised Pay As You Earn plan. The Department of Education reviews my income on a yearly basis and determines my monthly repayment amount based on my previous year 's tax information. I have also been periodically submitting requests to certify the number of qualifying payments towards Public Service Loan Forgiveness. I submitted an Employment certification form as recently as XX/XX/XXXX. 

The Department of Defense has made three lump sum payments directly to my loan principal on the following dates : XX/XX/XXXX for {$15000.00}, XX/XX/XXXX for {$15000.00} and XX/XX/XXXX for {$15000.00}. 

I was incorrectly advised by FedLoan Servicing that when the Department of Defense made lump sum payments towards my loan principal, I was still required to make my monthly payments each month because their lump sum payment only counted as 1 payment for purposes of PSLF. I recently completed and submitted an Employment Certification form for PSLF XXXX XX/XX/XXXX ). I noticed that Page 4 reads : " You may also receive credit for qualifying payments if a lump sum payment is made on your behalf through a student loan repayment program administered by the U.S. Department of Defense ( DOD ).. if a lump sum payment is made on your behalf through a DOD student loan repayment program, the Department will give you credit for qualifying payments equal to the lesser of ( 1 ) the number of payments resulting after dividing the amount of the lump sum payment by the monthly payment amount you would have made under one of the qualifying repayment plans listed below, or ( 2 ) 12 payments. ". Based on the DoE explanation of these lump sum payments, as of XXXX XX/XX/XXXX, I did not need to pay again for the next 12 months following a lump sum payment made to my loans by the Department of Defense. However, FedLoan Servicing incorrectly advised me that I was required to pay for everyone month because according to them the lump sum payment by the DOD only counted as 1 qualifying payment for PSLF. 

On XXXX XX/XX/XXXX, I submitted a complaint to the Consumer Financial Protection Bureau ( Complaint # XXXX ). In my complaint I stated : I would like a refund of all of the payments that I made in excess that I was not required to pay -- because they were already paid on my behalf by the DOD -- including specifically the payments made in... XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XXXX XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XXXX XXXX, XX/XX/XXXX and XX/XX/XXXX. FedLoan Servicing responded to my complaint and statedin partThe following payments covered by the lump sum payments from the DOD may be submitted by FLS to be refunded to you without decreasing your qualifying payment count : XX/XX/XXXX {$250.00}, XX/XX/XXXX {$250.00}, XX/XX/XXXX {$250.00}, XX/XX/XXXX {$250.00}, XX/XX/XXXX {$250.00}, XX/XX/XXXX {$250.00}, XX/XX/XXXX {$34.00}, XX/XX/XXXX {$270.00}, XX/XX/XXXX {$270.00}, XX/XX/XXXX {$270.00}, XX/XX/XXXX {$270.00}, XX/XX/XXXX {$270.00}, XX/XX/XXXX {$250.00}, XX/XX/XXXX {$6.00}, XX/XX/XXXX {$270.00}, XX/XX/XXXX for {$270.00} and XX/XX/XXXX for {$270.00}. These total {$4000.00}. These refunds will not be submitted without a borrower request. 

I already made a request to them through my original complaint to have my double payments refunded to me. I spoke to several representatives from FedLoan Servicing about this refund. Since I submitted Complaint # XXXX, numerous FedLoan Servicing employees stated that I needed to complete a Military Forbearance Request to receive my refund. I was not in forbearance during this time period because I was in active repayment and the DoD was also paying the loan on my behalf. I refuse to sign a document that says that my loans were in forbearance when they were not. This appears to be another deceptive tactic of PHEAA to prolong my repayment period and hinder my ability to qualify for PSLF. FedLoan Servicing Representatives also told me that when the company receives a DoD Lump Sum Payment, their internal policy is to apply the payment to the 12 proceeding monthsmonths that the Servicemember has already paidrather than apply the payments to the 12 following months. What this means is that FedLoan Servicing has implemented internal policies to charge twice every single U.S. Servicemember who receives a student-loan repayment benefit from the DoD who is also working towards qualifiying for PSLF. As I stated in my previous complaint, I would like my double payments to be refunded in the amount of {$4000.00}. I refuse to sign a document stating that I was in forbearance during this time period as a condition to receive this refund, because I was not in forbearance. I request that FedLoan Servicing stop manipulating federal policies and regulations designed to protect borrowers to their own financial benefit of prolonging borrower 's loan repayment. They have not only harmed me, but all Servicemembers who receive this kind benefit as part of their military service.