Consumer complaint received 2019-02-26
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: AES/PHEAA (OR)

Upon reading XXXX XXXX resignation letter last XX/XX/XXXX ( the former student loan ombudsman at the Consumer Financial Protection Bureau ), I felt compelled to file a protest, detailing the financial and emotional abuse Ive endured since I decided to enroll in the Department of Educations Public Service Loan Forgiveness program.

Even if this is nothing more than an exercise in futility or a whimper in the wilderness, I feel it would be a dereliction of my duty as both a consumer and a citizen if I didnt lodge an official complaint, to go on the record, because I have been harmed personally by the odious and improper student loan practices of the aforementioned PSLF program. Even more, to compound this grievance, I feel Ive been abandoned by the very same Bureau ( the CFPB ) that was created to serve as my advocate, and tasked by Congress to protect me from such blatant exploitation! 

After experiencing the aggravation firsthand, over the course of a few years ; after having to deal with the mandates of Public Service Loan Forgiveness program and, particularly, how this is interpreted by XXXX XXXX XXXX ( a contracted company the Department of Education has asked to handle the administration and customer service for its PSLF program ), I felt I could sit idly and silently no longer. 

The abbreviated version of events : I was recruited to work for a rural XXXX in XX/XX/XXXX ( XXXX XXXX XXXX in XXXX XXXX, XXXX  ). Part of the recruiting pitch ( and part of the allure ) was that my student debt would be forgiven after ten years of service, if I came to work for them, being that they are a qualified county facility. In other words, if I came to work for them and continued to make my loan payments, whatever balance remained, so I was told, after ten years of service, then that remaining balance would be forgiven. What a recruiting pitch! This sounded great. I did some research into the Public Service Loan Forgiveness program, and sure enough if I worked for a public service-eligible XXXX  ( which this was ) then my debt would be forgiven after 120 payments. So, with this lucrative perk in mind, I accepted the position to XXXX XXXX XXXX XXXX XXXX XXXX. I decided to relocate, dragging my family 1,800 miles across the country, moving from XXXX XXXX to the XXXX XXXX. 

I moved in XX/XX/XXXX, and started working the following month. It took from XX/XX/XXXX to XX/XX/XXXX to be placed into an eligible PSLF repayment program ( 12 months! ). Thats a whole year ; ten percent of the time I was supposed to be working in a qualified environment. For some reason, my spouses employment status prevented me from being put into an eligible program. Why would my husbands employment status be a deciding factor, delaying my enrollment? The program clearly states that I only need to be working at a qualified facility for a requisite length of time ( and be enrolled in a qualified repayment plan ). My husband was out of work when we applied, and this fact somehow disqualified me from consideration! Why? This was the first major red flag that something was amiss, and rotten in the state of XXXX. 

Again, I was hired by XXXX XXXX XXXX XXXX ( XXXX XXXX XXXX XXXX, XXXX, XXXX XXXX ), to be their full-time XXXX XXXX, working 40 hours a week. I took this position based in part by the false promise of the PSLF program, believing that my student debt would be forgiven after ten years of service/payments I was working at a public service XXXX when I applied for PSLF ; my employer certified the necessary documents immediately. Still, I was denied because I was told they couldnt certify my husbands employer. I told them he was unemployed and nothing but crickets and denials. An entire year went by until I was placed in a PSLF qualified repayment plan. 

And, how did I finally get accepted? Lo and behold, when my husband was hired to work in XXXX, XXXX, at the end of XX/XX/XXXX then, suddenly, I was approved and enrolled into an eligible PSLF repayment program. HOWEVER, at this time, somehow the proverbial they decided to recalculate how much I would owe on a monthly basis. Based on some unknown algorithm, a figure that determines my households ability to repay, my monthly payments ballooned from {$340.00} a month to {$560.00}. This doesnt sound like a loan forgiveness plan It sounds like, OK let us re-amortize your loan, figure out what amount you need to pay to pay-off the loan in 120 payments, with the service provider grabbing their 33 % markup in profits ( off the interest ). This is a total bait and switch. Its actually mocking me when the PSLF uses the word forgiveness because there isnt a penny thats being forgiven. I am paying off the loan, in its entirety. 

The parameters are clear : Public Service Loan Forgiveness is a federal program that ( supposedly ) forgives federal student loans for borrowers who are employed full-time ( 30+ hours a week ) in an eligible federal, state, or local public service job. Where in this does it stipulate that your spouse must be working? Where does it state that the program will review your households annual income and then determine how much you owe, per month, based on your households financial vitality? Why does this matter? Why should it? The program was established to help certain facilities and regions attract talented candidates this is the spirit that led to the creation of the program. Its supposed to be an added benefit, not an aggravation! 

HOW IS IT THAT THIS IS CONSIDERED LOAN FORGIVENESS? 

In other words, heres what the actions of PSLF are stating loudly to me : Go work in public service and qualify for loan forgiveness and then pay nearly seventy thousand dollars on a XXXX XXXX   dollar balance. And, to mock you, we will call this a loan forgiveness. This isnt forgiveness, this is merely paying off a loan in ten years!

This is blatant bait-and-switch. This is fine print nonsense. There is no loan forgiveness being offered here. This is simply taking a 20-year loan repayment plan and changing it to a 10-year loan payment plan. I never would have moved halfway across the country, moved to a rural community, if I knew this was what the PSLF offered. This spits in the face of the idea of loan forgiveness and betrays the intent behind the creation of such a program to begin with. Again, I ask : how is this a reward for public service?

For a more detailed explanation of my plight, allow me to expound on the particulars : My name is XXXX XXXX. I graduated, with degree, from the XXXX  XXXX University XXXX program ( XXXX XXXX XXXX XXXX ) in XX/XX/XXXX. During my schooling, I amassed approximately {$46000.00} in student loan debt. ( This was a wise investment in my future, on my part, because XXXX   is a fruitful career path with lots of job openings and opportunities ; According to a XXXX report from XXXX, the median annual income for an XXXX was nearly {$82000.00} ). 

Immediately after graduation, in XX/XX/XXXX, I began working as an XXXX for a XXXX, XXXX  based XXXX -- XXXX XXXX  XXXX XXXX. Then, six months later, I began to make my student debt payments, promptly, after my initial grace period expired. 

Initially, I enrolled in the 20-year plan. I did this to keep my payments as low as possible ( even though this repayment plan incurred the biggest interest cost ). I was fine with this, and with paying the enormous interest, because I knowingly entered into this obligation understanding the liability I was taking on. Like I wrote earlier, this was an investment in my future and it was worth it. Sure, I was perplexed to understand a system where the government would loan money to banks at zero percent interest rate, then those banks turn around and lend that money out at interest to students ( to encourage banks to lend money to students for education ). I mean, shouldnt the government simply loan money directly to students, so the government could earn the usury profits, and so students would receive the lowest interest rate possible )? Doesnt that make more sense, for a government of, by, and for the taxpaying people. 

From XX/XX/XXXX through XX/XX/XXXX, over the first 53 months paying back my student loans, I made every monthly payment. My payments were in the {$340.00} range. I paid approximately {$18000.00} over the course of these fifty-three payments ( of which only {$4200.00} went towards principal, and {$14000.00} going towards the interest ). 

I moved to XXXX in XX/XX/XXXX. I began working at my new position that XXXX. From XX/XX/XXXX through XX/XX/XXXX, for almost 6 months, I was attempting in vain to enroll in the Public Service Loan Forgiveness program. Even though I was eligible, and shouldve qualified without incident, I was denied about three times because there was an apparent issue with my husbands work. When we moved, my husband was no longer employed. He was working full-time in XXXX, at a XXXX XXXX, but when we moved to XXXX  he didnt have employment ( other than XXXX  XXXX work he did, for about 6K a year ). He wrote a letter and said as much, but we still couldnt qualify The PSLF program wouldnt approve my application because of some hiccup with my husband, which to this day I have no idea what the issue was. I was told they couldnt verify employment, even though I constantly told them that my husband wasnt employed ( at the time of my application ). 

Anyway, in XX/XX/XXXX, my loans were consolidated from XXXX to XXXX XXXX. Against my wishes, I was enrolled in a program that didnt qualify for the PSLF. My payment was about {$320.00}. I called for the umpteenth time Anyway, that XX/XX/XXXX my husband was hired by XXXX XXXX XXXX. And, would you believe, this was when the PSLF program finally approved my application. Now that my husband was working, for some particularly strange reason, the program accepted my application! Why would my husbands employment status determine my eligibility? 
So, after certifying my employment at XXXX XXXX XXXX, and calibrating what the PSLF deemed I was mandated to pay monthly, I was finally enrolled into the PSLF program in XX/XX/XXXX ( one year after I began the enrollment process ). And, guess what my payments were tallied at {$560.00} dollars a month! What a joke. How is it that this is considered loan forgiveness?

In essence, 120 payments of {$560.00} comes to about {$67000.00}. When I consolidated my loans into this PSLF program, I owed {$46000.00}. This was more than my original loan amount ( because after 4.5 years of payments, most of my payments when towards paying the interest down ). So, when I accepted the job at a rural XXXX, and got excited when I heard about the PSLF perk, little did I know that loan forgiveness meant paying {$67000.00} over 120 payments to pay off the existing {$46000.00} balance.

Changing the loan from a 20-year payment plan to a 10-year payment plan is not loan forgiveness. At the end of my 120 PSLF payments, altogether, going back to when I first began paying off my debt, I wouldve ended up paying {$85000.00} total in payments, from the time I made my first payment in XX/XX/XXXX. Nearly {$86000.00} dollars on a {$46000.00} loan! 

But, the part that aggravates me most, is the misleading fact that I enrolled in the PSLF program, owing just {$46000.00}, and the PSLF program upped my payments from {$340.00} to {$560.00}. In essence, the program demands that I pay about {$67000.00} over ten years, and has the gall to deem this loan forgiveness. 

In conclusion, contending with the deceitful fine-print and the legalistic tentacles of the program has weakened my faith and trust in the Department of Education in general ( and the student loan industry specifically ). The financial turmoil spawned by the false promise of the PSLF program has directly impacted my familys standard of living, while, on a more personal level, the emotional distress caused by the misleading PSLF propaganda has wreaked havoc on my gastrointestinal tract. Just the mere thought of the programs criminal bait- & -switch violations, no matter when the thought surfaces, irritates me beyond repair. What does this say about the student loan industry? When a GAO report discovers that 99 % of applications have been denied ( 29,000 applications denied! ), I worry about what will happen when I make my 120th payment. Im upset now, after only 30 payments ( only 1/4th of the way thru ) I dont trust the PSLF program, and Im already bracing myself for more trouble when I make my final ( 120th ) payment. I dont trust that the Department of Education will honor their pledge. To be frank, I have zero faith that the PSLF will live up to its obligation. If it took over a year to qualify and enroll in the PSLF repayment service, I fear what awaits for me down the line.