Consumer complaint received 2016-10-18
Product: Student loan — Federal student loan servicing
Issue: Dealing with my lender or servicer — Don't agree with fees charged
Company: AES/PHEAA (GA)

On XXXX/XXXX/2016 I received an email from My Fed Loan stating that XXXX XXXX XXXX notified My Fed Loan that I am enrolled in school and my loans have been taken out of repayment and put on an In-School Deferment. My loans had been in repayment leading up to XXXX/XXXX/2016. I called My Fed Loan I believe on XXXX or XXXX and asked why my loan had been taken out of repayment without my authorization. The phone rep stated that when you enroll in school your loans are switched out of repayment to deferment by a computer process. I stated that I did not authorize this account change and asked to have my account switched back to repayment. They told me they would send me a waiver that I can fill out to prevent un-authorized deferments from being entered in the future. I asked if there would be any penalty associated with this deferment being entered on my account and they said " no ''. I have checked the payment transaction log and found I was improperly assessed a penalty interest rate capitalization on XXXX in the amount of {$38.00}. I only discovered this recently as no notification is issued to the borrower that an interest capitalization took place and in conjunction I was told by the agent that there not be a penalty associated with the un-authorized account change. My Fed Loan gives borrowers a phone number to call named " XXXX at XXXX '' which is supposed to be an " independent '' oversight body. I contacted them to have the improper interest capitalization reversed as the account change leading to it was not authorized by me at any time. I spoke with XXXX XXXX twice about this issue on XXXX and XXXX. He was combative and objected to my complaints. I informed XXXX XXXX that the deferment account change was un-authorized. He told me My Fed Loan does n't need the authorization of the borrower to effect an account change. I informed him that if a penalty is assessed on the account for the change then it is incumbent upon My Fed Loan to receive authorization to alter my account. He defiantly stated " we do n't need your authorization ''. I asked why I was n't notified that there would be a penalty for this un-authorized account change and he stated My Fed Loan has no obligation to inform borrowers of an interest capitalization penalty from an un-authorized account change and has no obligation to give borrowers warning of the capitalization date in order to give borrowers a chance to pay down the interest to prevent it from capitalizing. This information is directly contradicted by the pdf I have from My Fed Loan that states " We will send you notification of any interest that accrues ( if applicable ) while your payments are postponed ''. No notice was issued of the interest or the capitalization date. XXXX XXXX further suggested " you go to the Supreme Court and get this changed ''. XXXX XXXX stated he would get back to me on XXXX and would continue his " review ''. He never called me back on this matter. The PDF evidence from Fed Loan I have indicates that the loan deferment was processed with a deferment period of XXXX to XXXX. The deferment is being back-dated to a period where it never existed on the account. The loan was in repayment on XXXX and XXXX ( the repayment auto-debit dates ). My Fed Loan is fraudulently back-dating a deferment on the account and then notifying the government my loan was in deferment from XXXX - XXXX when it reality the loan was n't as the deferment is false due to back-dating. The practice of back-dating a transaction for a period where the deferment never existed is fraud. XXXX firm back-dated trades that never existed My Fed Loan is using a back-dating scheme as well to keep borrower 's in repayment as long as possible by capitalizing interest further making it harder to repay the loan.