Consumer complaint received 2021-01-31
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: AES/PHEAA (DC)

FedLoan Servicing has continuously misapplied payments exceeding the minimum balance due in violation of my standing instructions approved by FedLoan Servicing in XXXX of XXXX, and reapproved in XXXX of XXXX. 

On XX/XX/XXXX, FedLoan servicing re-approved* standing instructions regarding how to apply payments made in excess of the minimum balance due. 

[ *These instructions had been previously approved on XX/XX/XXXX. I had to resubmit these instructions on XX/XX/XXXX after research into my account showed me that 28 payments ( totaling {$4600.00} ) had been misapplied, specifically allocating {$2800.00} of said payments incorrectly and in violation of these instructions. This was retroactively corrected after various attempts at contacting them ; though I was ultimately charged more because of their negligence, I opted to move forward following the correction, and re-approval of my standing instructions ; this complaint is not about that situation, though the context is helpful. ] On XX/XX/XXXX, I made a extra payment using a XXXX XXXX award ( received for my XXXX XXXX ) of {$1300.00}, intending to pay all outstanding interest and then have the excess payment ( of {$0.00} ) by applied to a specific loan according to my standing instructions. This payment was applied ( seemingly randomly ) with complete disregard to these agreed to instructions, paying the principal of some loans, the interest of others, and nothing to other loans. 

On XX/XX/XXXX, I emailed Fedloan through their website flagging this misallocated payment. 
On XX/XX/XXXX, they responded asking for details of my preferred allocation. 
On XX/XX/XXXX, I sent them detailed information about the incorrect allocation and how I wanted it corrected ( in accordance with my standing instructions ). 
On XX/XX/XXXX, they informed me that " When payments are received from XXXX, the payments are applied to all of loans proportionately. The means that loans with larger balances would receive more of the payment and loans with lower balances would receive lest of the payment. XXXX payments are not applied per standing instructions. Your payment was applied correctly. '' Though I was confused by this, and uncertain if the math checked out, they retroactively applied the XX/XX/XXXX payment correctly and so I moved on. 

On XX/XX/XXXX, I made a extra payment using the XXXX XXXX award of {$1200.00}. I had no minimum due and no interest on any of my loans. I explicitly asked that it be applied to a specific loan ( in accordance with the one I had prioritized in my twice-approved standing instructions XXXX. They applied {$450.00} to the loan I indicated, and then {$760.00} XXXX a majority of the payment ) to a different loan. Not only did this violate my twice-approved standing instructions, it contradicted what Fedloan servicing indicated regarding how they apply XXXX Payments : the payment was not applied to all loans ( only 2 of 7 ) nor was it applied proportionally ( the smaller of the 2 loans paid received a majority of the payment ). 

On XX/XX/XXXX, I sent an email through their website indicating their repeated mistake and have not heard back, nor has the issue been corrected. 

On XX/XX/XXXX, I made another extra payment using the XXXX XXXX award of {$2400.00}. I had no minimum due and no interest on any of my loans. I explicitly asked that it be applied to a specific loan ( in accordance with the one I had prioritized in my twice-approved standing instructions XXXX. They applied {$930.00} to the loan I indicated, and then {$1300.00} ( a majority of the payment ) to a different loan, paying it in full. Once again, not only did this violate my twice-approved standing instructions, it contradicted what Fedloan servicing indicated regarding how they apply XXXX Payments : the payment was not applied to all loans ( only 2 of 7 ) nor was it applied proportionally ( the smaller of the 2 loans paid received a majority of the payment ). 

On XX/XX/XXXX, a direct debit payment was made. While the excess portion of that payment was allocated correctly, due to their previous misallocation of payments one of the loans is considered paid in full and no payment was made toward it. If the previous misallocations ( from XX/XX/XXXX and XX/XX/XXXX ) are corrected, then there will have been a balance due on this specific loan and the payment made on XX/XX/XXXX will likely need to be reallocated to reflect that. 

Today, I submitted another email through fedloan website reiterating these issues and informing them I would be filing this complaint.