Consumer complaint received 2020-01-24
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Don't agree with the fees charged
Company: AES/PHEAA (CA)

In XX/XX/XXXX I received a letter from Fedloan Servicing informing me that my income based repayment plan recertification would be coming up in a few months. I have opted to receive all of my correspondence from them via mail, as I have repeatedly had problems in the past with their emails going to my junk email. The letter stated " In about 2 months, look for another communication from us with easy instructions and a direct link to recertify online. '' I had a one month old baby at this time, so needless to say, things were a bit hazy, but the letter explicitly said that I would receive another communication when the recertification was due, so I planned on dealing with it when that correspondence came in the mail. 

The follow up letter never came. I checked the app in late XX/XX/XXXX when it dawned on me that I had never received anything else, and saw that I had missed the recertification window and my monthly payments were going up substantially AND that the interest on my account would be capitalized. I was panicking and immediately called Fed Loans. I explained to them that I never received the official letter when the time for recertifying came up, and they told me that it had probably been emailed or could be accessed in the app. I told them that is exactly why I am signed up to received mailed documents ( and she confirmed that was the case ), because I hadn't received any emails from them nor any letters. She told me at the time that the terms said that the interest " may '' capitalize, but that may not be the case. She also said that I would be able to get the payments lowered again if I sent updated pay stub information, as I hadn't worked for 6 months by that time due to the birth of my baby and complications after. She said in the meantime the account could be put on forbearance so I would not have to remit the $ 600+ payment that was quickly approaching. It seemed like all was not lost. 

A few days later I received a letter stating that the interest on my account may be capitalized due to a forbearance, so I immediately called Fed Loans and told them to take the forbearance off. They said they could not. They also told me that the interest was already being capitalized because I missed my window of recertification, so it would not matter if the forbearance was applied or not. I pleaded with them and explained again that I never received the recertification mailing ( they fully admit that it was never mailed to me ), but they said that there was nothing that they could do. I tried to speak to a supervisor, sent email inquiries, etc., but did not receive responses. I also requested an audit on my account to show how much longer I had to make payments, etc., and never received responses to that either. 

They capitalized {$8900.00} in interest over this and added it to my principle. It was/is sickening. That's more money than I made the entire year last year. I was heartbroken over this and XXXX  and was telling the nurse that visits our home for our baby about it, and she came back a week later and thanked me because I barely saved her from the same fate! She received the first letter and never received the follow up that is promised in the first correspondence. Then, a month later, I told my sister what happened, and she too logged onto her account and barely made the cut off date as well. They are doing this to everybody. Sending a letter saying to look out for another letter that never comes is setting people up for failure. I can only assume that they are making a ton of money off of this. They added about {$9000.00} to my loan in the blink of an eye. 

Here we are, a year later, and they are doing THE SAME EXACT THING. Obviously I know better now after learning the hard way, but I am sure that many other people do not, and it is just a sickening business practice that they continue to take advantage of. For this year 's recertification, I received my initial letter XX/XX/XXXX and once again it stated " In about 2 months, look for another communication from us with easy instructions and a direct link to recertify online. '' This lets people 's guard down, making them think something is coming in a few months to walk them through this process. It is now past that two months later, and I have received nothing else. They continue with these twisted, misleading practices year after year. It is simply unethical, and I know they are aware because of people like me and the calls and emails that I have made.