Consumer complaint received 2019-03-07
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: AES/PHEAA (MT)

I have been under an Income Driven Repayment Plan for many years. This past year they raised by payment by over XXXX XXXX/mo when my income did not increase by that much. I called in XX/XX/XXXX to ask why this was. The rep told me about the REPAYE plan that would base my payment off of 10 % of my income rather than 15 %. She assured me that I'd still qualify for the PSLF program under this repayment plan, so I said lets do it. She told me the only down side is that moving from IBR to REPAYE requires one month of a standard payment, but that I could select a small amount, as little as {$5.00} to pay that month during an administrative forbearance month and then would go into REPAYE. 

I received an email directing me to the Student Loan page ( federal page ) to answer a series of questions about my income, spouses income, number of children, etc. This was approximately 10 questions at most. I then electronically signed this document -- my spouse got an email verifying the information as true and he signed off. 

The issue and reason for my complaint comes from a Capitalized Interest notice of over {$20000.00} that I received in XX/XX/XXXX. When I asked why i was having interest capitalized I was told that happens if you move between plans. When I asked where I was notified of this either in writing or verbally followed by consent of understanding, I was directed to page 8 of the application. The issue is that this page 8 was never provided to me during the above electronic questioning that I mention. Further more, the terms listed on page 8 state capitalization will be done when leaving the plan -- yet plan is not clearly defined. One could see this as the IDR plan ( which there are numerous types ). If I had been given a direct notice of -- you understand that by leaving IBR and going to REPAYE that your interest will be capitalized at the amount approx $ XXXX, i would have NEVER consented. 

Not only are reps pushing for this REPAYE plan, but XXXX XXXX XXXX is not adequately notifying consumers of big changes that such moves can create. This almost seems as if they are purposely trying to get more interest from borrowers. With any other loans -- for example my mortgage. If I were to refinance, I would receive VERY clear documentation that the new interest rate is X, the new payment are X for X number of months, etc BEFORE I agree with signature. Why is XXXX XXXX not held to this same standard? My husband immediately called on his loans when we received word about why my interest was capitalized and asked for them to STOP the processing of moving him to REPAYE. The rep actually told him that capitalized interest won't really matter because he is under PSLF and that will just mean more that is forgiven when the time comes. That is NOT a promise. In fact the PSLF program is under direct attack by the current administration and the fact that reps are saying this is XXXX. My husband was wise and said, NO -- make it stop now! 

Please help by looking into sneaking practices of not clearly notifying borrowers of capitalization of interest and what " leaving a plan '' actually means. $ XXXX is a HUGE amount of money. 

You will see from the attachments both the full PDF application that was not accessible until AFTER I signed off AND the second attachment is the language found in the electronic application when signing. You will see it mentions the need to pay a min of {$5.00} for a month between the two plans  if switching and many more items BUT There is nothing about interest capitalization OR a statement saying I have read all links provided to fully understand the plan.