Consumer complaint received 2015-10-08
Product: Student loan — Non-federal student loan
Issue: Dealing with my lender or servicer — Received bad information about my loan
Company: AES/PHEAA (MA)

I have a fixed rate student loan for an 84 month term at 5.65 % ( a discounted rate because I have automatic ACH deduction ). After 12 months of payments, which were not calculated correctly for that interest rate for an 84 month period, I received a letter telling me my payment was increasing due to an interest rate change. The higher payment is being deducted from my checking account. I have attempted to resolve this issue with AES several times -- XXXX phone calls and XXXX letter, to which they have not responded. Below is the text of the letter I sent to them. 

XX/XX/2015To Whom It May Concern : I am writing to question a change in the terms of my student loan. I spoke to XXXX different representatives about this issue on XXXX separate occasions, neither of whom could give me accurate information. 
Several months ago, I received a letter from AES stating that my monthly payment would increase in XX/XX/XXXX because of a change in interest rates. NOTE : My loan is a fixed rate. At that time I spoke to a representative who assured me that the letter had gone out in error, because it was the time of year that interest rates changed for those who have variable rate loans. I accepted her response. 
About a month later, I received the same letter, but ignored it, assuming it was simply sent in error again. However, the new ( increased ) payment amount was deducted from my checking account in XX/XX/XXXX. I called again and spoke to XXXX, who attempted to explain why the payment had increased. Her explanation made little sense. The bottom line is, the new terms of the loan mean that I will pay MORE over the life of the loan than the loan contract states. 
Here are my calculations : The loan agreement was originally for {$13000.00} at 5.65 % ( ACH deduction discount ) for a term of 84 months. 
According to XXXX 's loan calculator, my monthly payment should have been {$190.00} for 84 months, resulting in a total paid of {$16000.00}. Instead, the payment was set at {$190.00} for the first twelve months. I understand that the interest rate was correct, but the payment amount was not. Why was n't the payment adjusted to reflect the discounted interest rate for having ACH withdrawal? 
The total paid for the first twelve months was {$2300.00} The new monthly payment is {$200.00} for a term of 71 months. That is a total of {$14000.00} plus {$2300.00} = {$16000.00} That is a difference of {$290.00} more I will pay than I should. 
Clearly, the months remaining should not be XXXX, but XXXX. More important, why are the loan terms changing when I have a signed contract stating I would pay over 84 months? 
The representative ( XXXX ) I spoke to did not understand the simple math I tried to explain to her. She insisted I would not pay more because more was going on the principal. I asked her to please send me some documentation to explain what she was talking about, and all I received was a print-out of the last XXXX payments, which is something I can access online, and which is not helpful in explaining anything. ( As an aside, XXXX was very patient and pleasant, if not knowledgeable or helpful. ) I have had many loans in my lifetime, and I have never had a change in terms for a fixed rate loan. I question the legality of a change in terms, and will challenge it if necessary. I am frustrated that I have had to spend several hours on the phone ( with at least 20 minutes on hold : why not hang up and call me back later? ), researching rates and writing this letter. 
I would appreciate your attention to this matter. 
Sincerely,