Consumer complaint received 01-10-2017 about Student loan (Federal student loan servicing) with AES/PHEAA (MI).
Issue: Can't repay my loan
Sub-issue: Can't get flexible payment options

Complaint: I was dropped from my income based repayment plan by FedLoan servicing in XXXX of 2016. they contacted me by email but never tried to call me, even after being delinquent for over 2 months, ( while they had my current phone number on file ). When I checked my loans myself, I found statements saying I needed to pay over XXXX dollars of standard repayments that had accrued in order to remove the delinquency ( i believe this is predatory and illegal ). Instead I contacted an Ombudsman from the XXXX. She instructed me to declare forbearance ( which Fedloan services did not tell me was an option. FedLoan services told me I had to pay the full 2 months payments on a standard repayment plan I was now on, and continue to pay that amount until a new IBR payment plan was processed. this sounded fraudulent so I contacted a XXXX ombudsman. 

After the Ombudsman talked with the student loan company, both parties ( lender and ombudsman ) told me on XXXX XXXX that I would be entered into forbearance and a new loan document asking me to pay a nominal {$5.00} fee would be sent to me. After this fee is payed, I was told I would enter my repayment plan. I was assured my application was in their system and being processed, and Fedloan services person even confirmed they had my income verification documents showing I made around {$16000.00}, and would pay XXXX on an IBR plan. All I had to do was pay a {$5.00} fee to place the loan back on the payment plan. They said I should allow 3 weeks for them to " process '' my plan, even though they literally had every piece of information in front of them. 

On XXXX XXXX I received a letter informing me they were missing documentation of my income, which makes no sense, because the woman over the phone was able to tell me my income 4 days earlier. when I called Fedloan services they tell me I need to fill out a paper application for the IBR plan, and submit paper copies of my income verification which directly contradicts everything they told the ombudsman, and everything it says on both their website and XXXX. why do they even have an app with income verification tools if you need to send a paper application as well? 

I believe this company removed me from my plan in the first place in order to threaten me with fraudulent back payments. since early XXXX I have been trying to have my IBR plan processed, which is supposed to take less than 2 weeks and it is taking over 2 months. I have had to reapply for the IBR XXXX separate times now in 2 months, and have gone onto forbearence twice and Fedloan services has instructed me at every turn to fill out another form or send something in, or wait 3 weeks for somethings to be processed. 

This entire time I have been living on an income of less than {$900.00} per month, working part time, and I can prove all of this. So I am well below the threshold for an IBR plan, and they even told me over the phone that I was eligible for {$0.00} payments. there is no excuse for them to be dragging their feet except to force me out of the IBR plan and into a plan where they can collect more money for not processing my information. 

I am still actively trying to pursue this matter with the ombudsman and Fedloan services, but I want to enter a formal complaint with the CFPB, as the behavior of my loan servicer has been dishonest and ( purposely! ) confusing, slow and incompetent to throw people like me into default so they can make more money off of fees.

Company response to consumer: Closed with explanation