Consumer complaint received 04-11-2017 about Student loan (Federal student loan servicing) with NEW YORK STATE HIGHER EDUCATION SERVICES CORPORATION (HESC)— (CA).
Issue: Dealing with my lender or servicer
Sub-issue: Trouble with how payments are handled

Complaint: The consolidated loan I 'm being ask to pay is predatory. Under duress, I agreed to consolidated XXXX loans when XXXX misapplied my payments ; put my financial credibility in jeopardy ; misrepresented material facts ; and then failed to properly disclose the terms of the consolidated loan. 

The Trap In XX/XX/XXXX, XXXX jeopardized my XXXX FICO score by misapplying my monthly payments. XXXX claimed they had the right to apply the payment for my XXXX Parent PLUS loans however they chose. When I sought a resolution, I was led to believe that consolidating my XXXX loans was the ONLY way to ensure that my payment would be applied appropriately. 

Questions : Please note : In all your responses please provide evidence to support your response. For example, if you say that you disclosed all the terms of this consolidated loan, I want to see indisputable evidence of precisely how you disclosed that information specifically to me. Also refer to the specific regulation that empowered all actions taken. 

1. Did XXXX have the right to apply payments as they wished even when I enclosed XXXX issued payment coupons with each payment? 
2. Did XXXX have the right to jeopardize my credit with their arbitrary application of payment? 
3. Was XXXX telling me the truth when they said that loan consolidation was the only way to insure proper application of payments? 
4. Did XXXX have the legal right to create a threatening environment so coerce me into flipping my XXXX loans into a consolidated loan? 

Note : I did not consolidate these loans because I could not make the payments, I did it to protect my financial credibility. 

Loan Disclosures At that time of consolidation, I had already made 18 payments on the XXXX loan ; 6 payments on the XXXX loan ; and 2, possibly 3 payments on the XXXX loan. I was unhappy that XXXX was proposing resetting the payment count to zero, and that the interest rate would become fixed. As compensation for what I was giving up, I was told that the first 24 payments would be interest only. XXXX FAILED to disclose that the number of payments on the consolidated loan would be 240 payments - double that of the loans being consolidated. I was shocked to discover this change in terms when I tried to reconcile my payment history in XX/XX/XXXX. That is when I recognized that I had been coerced into a predatory loan. Doubling the number of payments increased my cost of the money I borrowed by approximate 45 % - roughly {$17000.00}. I would not have agreed to such an outrageous increase in cost to protect my credit worthiness. I would have sought a more equitable and reasonable solution. 

Loan disclosure questions : 1. What are the loan disclosures XXXX was required to make and how precisely did they do that in the case of this loan? 
2. You claim that I was properly informed of the change in the number of payments. Please provide indisputable evidence that I knowingly and without duress agreed to the increased number of payments. Telling me I selected MAX-2 Option does not answer my question. 

Other possible violations of my rights : 1. Contract of Adhesion - When attempting to resolve the conflict regarding this loan. I 've repeatedly been told that it 's impossible to change the terms of this loan, under any circumstances, for any reason, and that such changes NEVER happen. Please provide regulatory evidence that confirms this statement. 
2. XXXX bullied me into deferments and forbearances even when I believed such action to be the wrong thing for me to do. 
3. Full disclosure of fees, and interest rates. Payment history does not provide line items for fees. Could not find documentation of fees charged, nor I have seen evidence that interest rates were properly disclosed prior to their application to my XXXX student loans. Please provide evidence that I was properly informed.

Company response to consumer: Closed with explanation