Consumer complaint received 2017-01-24
Product: Student loan — Federal student loan servicing
Issue: Dealing with my lender or servicer — Trouble with how payments are handled
Company: ACS Education Services (GA)

When I graduated from XXXX school XX/XX/XXXX I consolidated Stafford and XXXX XXXX loans into a Federal Direct Consolidation Loan and, thus, became locked into an 8.25 % interest rate. The consolidated Federal Direct Loan I took out was {$60.00}. 
After XX/XX/XXXX Interest rates on student loans dropped as low as 1.5 % but I could not refinance ( re-consolidate ) my loan to obtain a lower interest rate because federal law prohibits the re-consolidation of a previously consolidated loan unless, of course, a private bank is willing to refinance the loan without collateral or the government 's guarantee. However, after outcry from private banks who wanted the lucrative risk free profits to be had, if they could just re-consolidate direct loans into guaranteed loans, there was a brief period where private banks were allowed to re-consolidate previously consolidated federal direct loans into guaranteed student loans if they could show that the borrower would benefit. 
So XX/XX/XXXX I re-consolidated my consolidated federal direct student loan into a FFEL loan with a private lender, and of two options I was offered that would lower my interest rate if I complied with certain conditions, I chose the one where I would get a permanent 1 % reduction if I made 36 on time payments or all of my payments on time for the next three years. 
My loan changed hands a few times before being transferred to XXXX as the loan servicer where it has remained for years now. I think the loan is now owned by XXXX. 
But XXXX has unconsolidated my loan and turned it into XXXX loans, a Federal Subsidized Loan and a Federal Un-Subsidized Loan. And now, they even send me XXXX bills. They send me a statement for my subsidized portion of my consolidated loan, which they have now unconsolidated into a separate loan.. And they send me another statement for the un-subsidized portion of the loan, which they have now unconsolidated into a separate loan. XXXX now sends me XXXX statements for my consolidated FFEL loan, a loan that was made as a re-consolidation a previously consolidated Federal Direct Consolidation Loan.But I only have XXXX loan!!! 
I went through various difficulties during the recession that followed my re-consolidation but I nonetheless never made a late payment and eventually met the condition to obtain the reduced interest rate. And XXXX did reduce the interest rate on XXXX of my " loans '' but not on the other XXXX. They only reduced the interest rate on my " subsidized loan. '' But, again, I only have XXXX loan!!! 
This is how XXXX came to the twisted conclusion that I had only met the 36 on time payments on half of my consolidated loan : Eventually I entered into the IBR plan, and I tried to make some payments even though my payment due under the income based re-payment plan was {$0.00}. I thought they would apply these payments to the principle but they refused to do so. They insisted these payments could only be applied to future interest. Yes, that 's right, future interest. And they only applied the payments to the future interest on my " subsidized loan. '' So payments made on my " subsidized loan '' got ahead of the payments made on my " un-subsidized loan. '' That is how they credited me with having only met the conditions to obtain the promised 1 % reduction on XXXX of my " loans. '' But wait a minute, I only have XXXX loan!!! I only have XXXX loan, and they only gave me the reduction on XXXX of that loan. That is what they did. They cheated me out of the promised rate reduction on my loan. And it is very upsetting that I ca n't re-consolidate at today 's lower interest rates because I already consolidated XX/XX/XXXX, yet my loan is now unconsolidated and I am denied the benefits of consolidation. 
XXXX also encouraged me to stay in deferment for years instead of entering IBR even though I told them I was going to go into IBR.. I now think I should have gone into IBR right away and they knew this.