Consumer complaint received 2018-03-28
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: AES/PHEAA (NY)

I simply need XXXX  to adjust how the payments to my account have posted and refund one of my XXXX checks for {$2500.00} back to XXXX. Here is the history of the issue : My loan payments were applied incorrectly, despite my instructions. I have been working at my present job for over 6 months and should have an overpayment towards my loans, instead I have " 0 qualifying payments, which was exactly the situation I have been trying to avoid. 

I have been working at XXXX XXXX XXXX, in a XXXX XXXX XXXX   job since XX/XX/XXXX, and my minimum payment under the PAYE program is {$360.00}. My account should now have an overpayment, but because my payments were incorrectly applied by XXXX, I am in default. My loans are at about {$240000.00} and my only way to repay them is to have them forgiven through Public Service Loan Forgiveness after the 120 months of qualifying payments. 

I spoke with XXXX, my servicer at the time, on XX/XX/XXXX, to make sure that a payment from the XXXX  XXXX  Education Award that was greater than my minimum would be applied towards future payments, and not go to interest. I explained that this was what I wanted, because I knew I only needed several months of payments covered by XXXX, as my law school has a loan assistance program that would kick in later. I also stated that the Public Service Loan Forgiveness Program employer certification form at page 4 specifically said it was possible, and I wanted to make sure I requested the loan payments correctly. That payment schedule also appears to be required by law, at 34 CFR 685.219 ( 2 ) ( attached ). XXXX  confirmed yes, that if I made a payment larger than my minimum, that additional amounts would go towards my future minimum payments. 


I then made two payments of {$2500.00} each, which were received by XXXX on XX/XX/XXXX and XX/XX/XXXX, because the address that XXXX  provided was different than the address that XXXX had on file and I wanted to make sure at least one payment went through so that I was not delinquent. Both payments went through. After I saw that both payments went through, I asked XXXX to refund one via calls and letters. However, they never refunded either payment. They said I needed to provide the bank account information and check number for the {$2500.00} from XXXX. I could not do that, for obvious reasons, though I did try calling XXXX to see if they could write a letter ( they could not ). 


The more pressing issue is that XXXX  also did not apply either of my payments the way that I requested ( and which appears to be required under 34 CFR 685.219 ( 2 ) ), by dividing the payment into multiple monthly minimum payments of {$360.00}. In XX/XX/XXXX, my XX/XX/XXXX application to the Public Service Loan Forgiveness program was approved, and my loans were switched over to XXXX. XXXX  could not see any payments from XXXX, and told me my loans were in default. However, they told me to wait, because the payments would eventually show if I had made them. 

Eventually, the XXXX  payments showed up, but they had been applied in full towards interest in XX/XX/XXXX. XXXX then needed me to make additional payments to keep my account current. Throughout XXXX, XXXX, and XXXX, I called, wrote, and faxed documents to XXXX and XXXX to try to resolve the issues above. However, XXXX said they can not adjust the XXXX payments because XXXX has to do that. XXXX  said they can not adjust the payments because the account is not with them. By XX/XX/XXXX, I was about {$1900.00} in default, even though I had paid {$5000.00} and my monthly minimum payments are {$360.00} under PAYE. 

My XXXX school program had kicked in, so I made a third payment of {$890.00} on XX/XX/XXXX from my XXXX school 's repayment funds and since I was worried about negative credit reporting, I released a fourth payment of {$1000.00} on XX/XX/XXXX from XXXX. In total, I have paid {$6900.00} towards my loans, even though only {$1800.00} should be due ( 5 months at {$360.00} ). I then released additional payments of {$360.00}, one is Thus, I have overpaid my loans by at least {$5100.00}, but until yesterday, my loans have been consistently marked as delinquent and I am at risk of negative credit reporting and I currently will not have my months of public service work counted towards my 120 qualifying payments under Public Service Loan Forgiveness. 

In late XX/XX/XXXX, I learned that XXXX  has a consumer advocate, so I made a complaint to them. I explained the situation and they responded again that there is nothing they can do. They sent me a letter on XX/XX/XXXX, explaining the same things described above. I made a complaint about them to CFPB, but XXXX XXXX position is still that there is nothing they can do. I need someone to simply update my account to apply the payments as intended. I also need to have the {$2500.00} from XXXX refunded so I don't have to pay taxes on payments that I did not authorize.