Consumer complaint received 2018-03-19
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: AES/PHEAA (VA)

My income based repayment plan ( IBR ) loans were initially serviced by XXXX. When I started XXXX XXXX XXXX for XXXX XXXX XXXX, I submitted to them the paper work to start tracking my 120 payments for the Public Service Loan Forgiveness program in XX/XX/XXXX. Shortly thereafter, my loan servicing was transferred to Pennsylvania Higher Education Assistance Agency. At that time, I spoke with customer service at PHEAA to make sure I was filing the correct and necessary paperwork so that I could start making immediate progress towards the 10 years of payments that the PSLF program requires.

For two years, I made one payment every month, which was applied to eleven different loans. Each month, my account online reflected one more payment made as progress towards the 120 required payments for the PSLF program. In XX/XX/XXXX, or thereabouts, the way my account was displayed online changed, and I discovered then that 3 of my eleven loans did not indicate any credit towards the required 120 payments. When I called customer service, I was told the reason was that the three loans were FFEL loans, and therefore non-qualifying for the program. 

That was the first time I became aware that all my loans were not eligible for the PSLF program, even though I had submitted the PSLF employment verification form at least twice, and had spoken to a number of customer service reps over the time period between XX/XX/XXXX and XX/XX/XXXX. 

After multiple discussions with different PHEAA reps on the phone, I was told to consolidate the three FFELs into a DIRECT loan so that future payments would qualify for PSLF. By the beginning of XXXX, I submitted the loan consolidation paperwork to PHEAA. It took PHEAA close to six months to complete the issuance of the new loan, which pushed out my PSLF payment progress by six months, on top of resetting the repayment of those three new loans back to 120 payments ( another ten years ). Credit towards progress for those did not begin until XX/XX/XXXX. 

So, even though I was initially told by PHEAA that my loans qualified for PSLF, somehow, no one told me that three of them did not. I only discovered that when the presentation of my account online changed. This happened at about the same time that a number of articles in the XXXX  XXXX were published that revealed that many people in the PSLF program had been lead to believe they were making progress towards forgiveness, only to discover after many years of payments and work in public service, that their payments or their loans did not qualify, even after having been told that they did. 

I believe that my ten year PSLF repayment has been extended to 13 years so that PHEAA can collect income based payments from me for far beyond what I should have to pay. It's outrageous that a subsidized federal loan that was issued to me through XXXX XXXX University for three semesters somehow is different than the other 8 semesters I received federal loans that do qualify. It's outrageous that I was not told by my loan servicer that a portion of my loans did not qualify for PSLF despite the fact that they became my loan servicer because I was attempting to participate in the PSLF program -- this I believe borders on fraud. It's also outrageous that the loan servicer took six months to issue the new consolidated loan ( the original loans were applied for and disbursed in a much shorter time period ). If it's not fraud, then it's sheer incompetence. In either case, this will cost me three years of additional payments, which will amount to something close to {$15000.00}.