Consumer complaint received 2016-08-16
Product: Student loan — Federal student loan servicing
Issue: Dealing with my lender or servicer — Having problems with customer service
Company: AES/PHEAA (OR)

In XXXX of 2016, I submitted an application to switch my income-driven repayment plan from Income-Based Repayment to the new REPAYE program. My application was not processed until XXXX 2016 and Fedloan Servicing placed my loans in administrative forbearance during that period. I paid my {$4.00} forbearance payment in XXXX, as I had requested when submitting my application to switch plans. I then received an additional bill for {$9.00} due XXXX XXXX, then yet another bill for a shocking {$1600.00}, due XXXX XXXX. 

I quickly called Fedloan Servicing to express my confusion and panic at having received such a large bill and was told that the {$1600.00} was interest that had accrued during my mandatory forbearance period while my application was being processed. Their customer service representative told me that the interest would capitalize into my principal and I need not concern myself with the amount. I was instructed to *not pay the {$1600.00} bill* and that when my new installment payment under REPAYE ( {$290.00} ) was due on XXXX XXXX, the large sum would be gone from my balance due. 

As of XXXX XXXX, that sum remains on my balance due. I have called Fedloan Servicing every month from XXXX through XXXX and received the same answer from them every month. Every customer service representative I have spoken with has told me that as a result of some administrative accident, the {$1600.00} in interest has not capitalized. Every representative I spoke with has submitted requests to process that sum and have it removed from my bill. In the meantime, I have faithfully paid my {$290.00} every month, in full and on time. No one has contacted me to update me with the status of solving my problem. I receive past due notices every month from Fedloan Servicing, which I have been instructed to ignore while they sort out whatever glitch has caused this problem. 

Today I was offered an incredible job at a wonderful organization that works to help women entrepreneurs secure business loans. The job itself would be life-changing for me, as the salary is {$10000.00} higher than I am currently earning and provides exceptional healthcare benefits that would allow me to start a family as I have always dreamed of doing. The job offer is contingent on a credit check. 

I pulled my credit reports today to make sure everything is in good order and was absolutely devastated to learn that on XXXX XXXX, Fedloan Servicing reported my installment loan payments as 90 days past due. My credit scores, previously around XXXX, are hovering around an abysmal XXXX. I believe Fedloan Servicing 's error will cost me this job, as there is no way to get my credit reports corrected during the hiring period for this position I was so excited to take. 

I called Fedloan Servicing today in tears and my call was immediately sent to an " escalation manager. '' XXXX, employee ID # XXXX, told me that there was nothing Fedloan Servicing could do to help me in my predicament ; my concerns about my credit and my future employment were summarily dismissed. I was told that I can not even file a dispute with Fedloan Servicing until they mail ( postal ) me the dispute form, which I must them mail back to them. I was also told by XXXX that the {$1600.00} is not accrued interest, but rather that it was a " full installment '' and that the customer service representatives ' prior requests to have that amount capitalized were all rejected on grounds of it being ineligible. I am told my only option is to apply for yet another forbearance, during which Fedloan Servicing will somehow erase the erroneous {$1600.00}. 

Fedloan Servicing 's customer service representatives are under-trained, misinformed, and spread that misinformation to customers. They do not follow up to make sure that the problems they create for borrowers are solved. Its application, billing, and payment processing procedures are dysfunctional.