Consumer complaint received 2020-04-16
Product: Student loan — Federal student loan servicing
Issue: Struggling to repay your loan — Can't get other flexible options for repaying your loan
Company: AES/PHEAA (IL)

I have two complaints/issues ( 1 ) I am currently enrolled in the public service loan forgiveness program. I submitted an application in XX/XX/XXXX to convert from an income-based repayment plan to the PAYE plan. In order to do so, there is always a 30 day billing cycle where the individual is flipped into a standard repayment plan, and most people elect to go into reduced payment forbearance for that one billing cycle ( followed by moving into the new repayment plan ). I received documentation that a decision would be coming in early XXXX, but this was delayed for unclear reasons such that my reduce payment forbearance took place in XXXX. However, I have received no payment recalculation for PAYE. The reason this matters related back to the COVID-19 related forbearance dictated by the CARES act which points out that these months of suspended payments/administrative forbearance will count toward PSLF. The Fedloan website notes that if one was in a qualifying repayment plan prior to the Pandemic ( my XXXX and XXXX bills were still my normal IBR payment ), then all payment periods during this pandemic will count as forgiven. However, because I was in the process of switching payment plans, no one has given me a straight answer as to what to do about this. I have called 3 different times to inquire about this and have gotten 3 different answers every time. 

( 2 ) My second and larger issue relates back to my qualification for PSLF. I originated my loans in XXXX and had planned to enter into PSLF from the beginning ( always working at non-profits ). I filled out and returned my first employer certification form in early XXXX. I had direct and indirect federal loans at the time, as well as a Perkins loan. After calling and discussing several times with a variety of customer service representatives, I was advised that my Perkins loan would not be forgiven and received several emails advertising and recommending a Federal Direct Consolidation Loan to combine all the loans for " one easy payment ''. I was specifically told on several occasions that a Perkins loan could be folded in with the other loans and could be subsequently forgiven as well  with no impact on my prior payments that counted. I called and spoke with multiple customer service representatives, and at the time my loans were held through XXXX XXXX. Based on this, I proceeded with the Federal Direct Consolidation Loan Application. 

I even received an email in XX/XX/XXXX stating " Dear XXXX, It's been brought to our attention that you recently applied for a consolidation loan. We wanted to make you aware that by consolidating you may lose some or all of the benefits on your XXXX XXXX-serviced federal loan ( s ). 
The benefits you could lose may include : * Potential on-time payment benefits * Grace status termination * Decreased forbearance time * Rate discounts If you'd like to keep the borrower benefits with your XXXX XXXX-serviced federal loan ( s ), please call us immediately at ( XXXX ) XXXX. We're here to help you Monday Friday XXXX XXXX. to XXXX XXXX  ET. '' There was never any mention of losing PSLF qualifying repayments. I called on SEVERAL occasions to ensure that my nothing would happen in terms of my PSLF eligibility and was told there would be no change to this. 

The loan was consolidated on XX/XX/XXXX, and then moved to FedLoan servicing shortly thereafter. I had previously submitted employer certification forms and had somwhere between 24-36 qualifying payments at the time. 

I submitted another employer certification form in XXXX, only to find that all my prior payments had been wiped out with the consolidation. Had I been aware of this, I certainly NEVER would have consolidated as it simply made no sense to do so. As a result, I had to start over in XX/XX/XXXX, wiping out payments made since XX/XX/XXXX when my loans originated. 

In retrospect, I understand the principle in terms of why consolidation would " start you over '' in terms of payments, but at the time I was given the opposite information on several occasions. I was alerted to the potential lost benefits above but nothing about PSLF even after specifically asking. I was given faulty information in the same way that other individuals were told that other repayment plans outside of income-driven repayment would count toward PSLF.