Consumer complaint received 2017-09-13
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: AES/PHEAA (MD)

On XXXX/XXXX/XXXX I sent the following email to Fed Loan Servicing for actions that I saw on XXXX/XXXX/XXXX : There seems to be a problem with my account and would like for someone to provide me with a detail explanation of what is going on, here is the situation : On XXXX/XXXX/XXXX my account showed that I had unpaid interest of {$980.00} On XXXX/XXXX/XXXX I made two payments to cover the interest {$750.00} and {$300.00} for a total of {$1100.00} This payment was more than enough to cover the interest, and as such, I should not have received compounded interest. In looking at the account and how payment was applied to the first payment of {$750.00} all went to interest. The second payment of {$300.00} made shortly after the first, only {$110.00} was applied to the interest ; the remaining {$180.00} was applied to the principal. This appears to be deceptive. Out of my {$300.00} payment, {$220.00} should have gone to the outstanding interest and {$71.00} should have gone to the principal. The method that was used left my account with {$110.00} of unpaid interest which compounded over the weekend, which should not have happened since more than enough money was credited to the account on the same day to cover the interest and a fraction of the principle. I need an explanation of how this happened and how this proper practice. Thank you for your help in this matter and have a wonderful day. 

I called FedLoan Servicing on XXXX/XXXX/XXXX and spoke with XXXX as a follow-up to the email sent on XXXX/XXXX/XXXX. In looking into the account, she was not sure why my payment was not allocated correctly. She put in a request to have the account reviewed and the payment reallocated. She told me that it would take 7 to 10 day to find out an explanation as to what happened and why it occurred. XXXX stated that it would take 10 to 15 business days to have the payment reallocated. I requested to have the review sent to me after it is done, which she put a note in the system to have this done. 

I called FedLoan Servicing on XXXX/XXXX/XXXX and spoke with XXXX. I told here that there seems to be a problem with my account, and this is not the first time that it happened, the same issue occurred on XXXX/XXXX/XXXX. I need to have my payment corrected, and my account audited. Here is what happened : On XXXX/XXXX/XXXX my account showed that I had unpaid interest of {$180.00} On XXXX/XXXX/XXXX I made a payment to cover the interest {$200.00} This payment was more than enough to cover the interest, and as such, I should not have received compounded interest. In looking at the account and how payment was applied to the first, only {$110.00} was applied to the interest ; the remaining {$81.00} was applied to the principal, which is wrong as it is FedLoan Servicings policy to pay off the interest first. Out of my {$300.00} payment, {$180.00} should have gone to the outstanding interest and {$16.00} should have gone to the principal. The method that was used left my account with {$110.00} of unpaid interest. I stated that I needed an explanation of how this happened and how this proper practice. XXXX placed the rested and said that she does not know how long the payment reallocation will take as Financial Management does it. Once the review is completed she told me that you only receive a callback and nothing in writing. I expressed how disappointed in this and that I would request once I receive the call to have the findings put in writing. The information that I received on the XXXX/XXXX/XXXX is different from the information that I received on XXXX/XXXX/XXXX regarding how and when I would receive the results of the investigation.