Consumer complaint received 2018-07-31
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: AES/PHEAA (NY)

I have a federal consolidated student loan that is serviced by Pennsylvania Higher Education Assistance Agency dba XXXX XXXX. The loan was consolidated in XXXX, but XXXX XXXX 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 XXXX since XX/XX/XXXX. I am currently under an income driven repayment plan called Revised Pay As You Earn, which was created by federal law. The Department of Education reviews my income on a yearly basis and determines my monthly repayment amount based on my previous year 's income tax returns. I have also been submitting periodic requests to certify the number of qualifying payments that I have made towards a program called Public Service Loan Forgiveness.  Because I am a service member, my interest rate is capped at 6 %, which is a requirement under federal law. I have three main issues with XXXX XXXX, which I have tried unsuccessfully over the last two years to resolve directly with them. 

( 1 ) XXXX XXXX  is miscalculating the amount that I owe on my student loans and overcharging me. Within the last four years I have paid approximately {$53000.00} towards my student loans, however, the total amount that I allegedly owe on the loans has increased approximately {$25000.00}. Approximately {$45000.00} of the amount that I paid was applied directly to the principal of the loans because the Department of the XXXX has made yearly payments on the loans of approximately {$15000.00} per year, which must be applied to the loan principal per XXXX policy. As of 6-months ago, XXXX XXXX XXXX own billing system online indicated that the total amount owed on the loan was {$200000.00}. Now, their billing system states that I owe {$250000.00}. This increase is inexplicable. I have continued to make payments and not requested additional student loans. According to XXXX XXXX, they improperly capitalized the outstanding interest on the loan reasoning that I did not submit my yearly recertification request within a timely fashion, which is incorrect. I attempted to use FederalStudentAid.gov repeatedly to submit the request electronically, then I switched to submitting a paper application that I completed by hand and uploaded to the XXXX XXXX  website. I have evidence of my numerous attempts to submit the yearly recertification application. Therefore, the capitalized interest should be removed. 

( 2 ) XXXX XXXX does not calculate my monthly repayment amount in a timely fashion after I submit my yearly request to recertify under an income-driven repayment plan and places me into forbearance -- or forces me into forbearance -- where I am not able to make qualifying payments towards Public Service Loan Forgiveness and interest is capitalized to my loan principal. In XX/XX/XXXX, I submitted a request to recertify my monthly repayment amount under the Revised Pay As You Earn Plan. XXXX XXXX acknowledge receipt of my application, but -- without my consent -- XXXX XXXX  placed my loan into forbearance while they processed my application. I called XXXX XXXX   and requested that they remove the forbearance so that I could make a qualifying payment for purposes of Public Service Loan Forgiveness. XXXX XXXX indicated that they could not do that for the current billing cycle and I missed the opportunity to make a qualifying payment in XX/XX/XXXX. Then, in XX/XX/XXXX, I again submitted my yearly request to certify my income to determine what my monthly payment amount was under the Revised Pay As You Earn plan. As explained previously, I used StudentAid.gov to submit electronic requests. XXXX XXXX  stated that they did not receive my request, even though I continued to submit it electronically -- at least 5 times. I also received notices from the IRS stating the my XXXX income tax information was provided to XXXX XXXX to calculate my monthly repayment amount. Eventually, it appeared that the electronic system was not working properly. I then uploaded a paper version of the yearly recertification to XXXX XXXX XXXX  website. The loan servicer took several weeks to review my request and then denied it stating that they did not have information about my XXXX income. They then capitalized all of the interest owed on the loan to the principal and increased my monthly repayment amount from {$270.00} to approximately {$2800.00}. They stated that I did not submit my request for yearly recertifying of my eligibility for income-based repayment in a timely fashion -- similar to what they did in XXXX. I resubmitted the form to them electronically and requested to attach my income tax information for my XXXX income taxes from the IRS. I then called XXXX XXXX and they told me that my only option was to place the loan into forbearance so that they can have additional time to calculate my monthly repayment amount under the Revised Pay As You Earn Plan. They read me some disclaimer stating that by placing my loan into forbearance ( so that they have an opportunity to process my income-driven repayment request ) they will capitalize all of the interest to the loan principal. I stated that I did not approve of them capitalizing the interest and that I was disputing the monthly payment amount of {$2800.00}. I am still attempting to resolve this issue with them. They have not processed my pending request to recertify my monthly repayment amount and my account is displaying that it is delinquent. Their servicing issues have been forced upon me and they are attempting to force me to pay more than 10x the amount that I was certified to pay based on my Adjusted Gross Income from XXXX and I have attempted in good faith several times to submit the IDR request to recalculate my monthly repayment amount under the Revised Pay As You Earn Plan. 

( 3 ) XXXX XXXX continues to charge me more than what is authorized by law under the Revised Pay As You Earn plan and the monthly repayment amount calculated by the Department of Education and states that my account is delinquent if I do not pay more per month than my certified monthly repayment amount. In XX/XX/XXXX, the Department of Education calculated my monthly payment to be {$250.00}. I paid this amount in a timely fashion every month. Then. in XX/XX/XXXX, the Department of the XXXX made a payment of approximately {$15000.00}, which brought the principal balance owed under the unsubsidized loan sequence down to XXXX. The unsubsidized loan sequence still had an interest balance of approximately {$700.00}. Once the principal balance of the unsubsidized loan sequence went to XXXX, XXXX XXXX XXXX  billing system started to stated that I owed more per month than {$250.00}. Every month, I made additional payments to try to get the billing system to correct this error. I also called XXXX XXXX repeatedly and requested that they correct the billing error. Then, in XX/XX/XXXX, the Department of Education calculated my monthly repayment amount again to be {$270.00} per month. I started to then pay this amount, and XXXX XXXX XXXX billing system continued to state that my account was delinquent. I continued calling XXXX XXXX in an attempt to get them to correct my account and reimburse me the overpayments that the system was improperly demanding that I pay. XXXX XXXX failed to correct the issue. I started paying {$280.00} per month because that was the only amount that appeared to maintain my account as current in their billing system -- even though my monthly repayment amount was supposed to be set at {$270.00}. I then submitted a request to certify the number of months that counted towards my 120 payments for purposes of Public Service Loan Forgiveness, and XXXX XXXX  did not include qualifying payments that I made towards the loan because their billing system was not functioning properly.