Consumer complaint received 2017-07-01 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: AES/PHEAA
State: PA

Complaint narrative:
I worked for the XXXX XXXX XXXX fromXX/XX/XXXX to XX/XX/XXXX and again from XX/XX/XXXX to XX/XX/XXXX as a XXXX XXXX XXXX and a XXXX XXXX to the XXXX XXXX XXXX XXXX XXXX. In XX/XX/XXXX, I began to work for the XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX as an XXXX XXXX. During all of this time, I was employed fulltime by the XXXX. I had a Consolidated Loan I obtained through the Federal Family Education Loan Program with a principal balance of approximately {$45000.00} upon which I was making payments to the American Education Services since XX/XX/XXXX. InXX/XX/XXXX, I began to make payments on this Loan under the Income Based Repayment Plan as part of the College Cost Reduction and Access Act of 2007. When I applied and qualified to make payments on my Loan under the Income Based Repayment Plan in XXXX XXXX XXXX through American Education Services, I believed that I would qualify for forgiveness of any remaining balance of my student loan if I continued to be employed by the XXXX or a XXXX XXXX XXXX and continued to make payments under my student loan untilXX/XX/XXXX. I never received any notification from American Education Services or any other source that in order to be eligible for public service student loan forgiveness, I had to apply to consolidate my Loan into Direct Loans through the XXXX XXXX XXXX Federal Direct Loan Program ( Direct Loan Program ).
Coincidentally, a work colleague whose sister worked at the XXXX XXXX XXXX  XXXX XXXX indicated to me in XX/XX/XXXXthat in contemplation of public service loan forgiveness in XX/XX/XXXX, I could begin to get my paperwork and documentation together for that forgiveness by requesting that my former employer and current employer complete Certifications of Employment and submit them to the Department of Education for approval. Human Resource representatives from both the XXXX XXXX XXXX and the XXXX XXXX XXXX  completed and submitted those Certifications to the Department of Education as I requested.
OnXX/XX/XXXX I received a Response to the Employment Certification Form submitted by the XXXX XXXX XXXX on my behalf notifying me that I am not eligible for public service loan forgiveness because I do not have eligible loan types. The following day, I called the Federal Loan Servicing Center, the entity that sent me the Response, at XXXX to find out the reason that my loans were not considered to be eligible. For the first time, after more than six ( 6 ) years of making payments under the Income Based Repayment Plan, I was told that in order to be eligible for public service loan forgiveness, I had to apply to have my Loan consolidated through the Direct Loan Program. While I was informed that I could apply for consolidation at this time for the Direct Loan Program, I also was informed that none of the regular payments that I had made on my student loans since XX/XX/XXXX would be counted in determining my ten ( 10 ) years of public service, which essentially would mean that I would be starting all over with regards to making payments toward the student loan forgiveness I was initially informed about inXX/XX/XXXX. I contacted the Direct Loan Consolidation Department that evening at XXXX and requested a Direct Loan Consolidation Loan Application to apply for consolidation of my loans under the Direct Loan Program, which the representative indicated to me would be mailed to me. When I again called the Federal Loan Servicing Center later that evening and was able to speak with a supervisor from the Federal Loan Servicing Center, she informed me that she was aware of situations where prior payments retroactively were considered when applicants applied for Direct Loan Program consolidation if the applicants did not have knowledge that they were required to apply for the program, that consideration of prior payments was not impossible and that payments prior to consolidation had been considered in relation to the Federal Student Loan Forgiveness program in those situations. However, further details were not forthcoming. Rather, that manager informed me that since the Federal Loan Servicing Center simply is a servicing center for the Department of Education under which the Direct Loan Program is administered, I would have to contact the Department of Education to request that any prior payments be considered in applying for consolidation of my Loan under the Direct Loan Program. The manager referred me to the Federal Student Aid Information Center at XXXX, and when I called that number later that evening, I was told that I had to contact the Department of Education directly, as the Federal Student Aid Information Center is not the Department of Education. When I located a telephone number for the Department of Education and called that number later in the evening, the Department of Education was closed.
The following day,XX/XX/XXXX, I attempted to call the Department of Education. I was unable to locate a telephone number in which I could obtain a live response. After doing some additional research that day, I determined, in fact, that the Federal Student Aid Information Center is an Office of the Department of Education, so I again embarked upon calling the Federal Student Aid Information Center at XXXX to find out if there was someone to whom I could present a request to have prior payments be considered when I apply for consolidation under the Direct Loan Program. After explaining the situation to one ( 1 ) operator and one ( 1 ) senior operator, I was transferred to a manager who explained to me that no payments prior to consolidation under the Direct Loan program could be considered and that she was not aware of any situations in which prior payments had been considered. When I asked if she could direct me to an office or a person to whom I could submit an explanation or request in writing, she indicated that I should contact my Congresspersons. On XX/XX/XXXX I received in the mail a Direct Consolidation Loan Application Package in order to apply for consolidation of my student loans under the Direct Loan program. However, when completing the application, the promissory note in the application packet required me to affirm, H. Any payments made prior to the date of consolidation of the loans I am consolidating will not count toward ( 2 ) the 120 qualifying payments require for Public Service Loan Forgiveness Since I did not want to forfeit the ability to seek forgiveness of the many months of payments that I had made on my student loans to American Education Services while employed by XXXX entities, I wrote to my Congressional representatives, the Honorable XXXX XXXX of the House of Representatives and Senator XXXX XXXX I never received a response from Senator XXXX despite one ( 1 ) telephone call I made following up with his office. I received a telephone call and letter from Representative XXXX  indicating that he had referred my inquiry to the Office of Federal Student Aid for a direct reply. On XX/XX/XXXX Representative XXXX mailed me a copy of a letter from the Office of Federal Student Aid indicating that all information provided by the Department of Education about the Public Service Loan Forgiveness Program clearly specified that only Direct Loans qualify and that there are no exceptions for any earlier payments made under any other program.
On XX/XX/XXXX I applied to consolidate my student loans with the Direct Loan Program. While I did not want to forfeit the ability to seek to count the prior payments I made on my student loans, the only way I was able to get into the Direct Loan program and to have my payments begin to count toward the 120 needed payments was to apply for and to be accepted into the Direct Loan Program. My application was approved, and I have been paying under the Direct Loan Program since XX/XX/XXXX, with payments that I have made since that time being included as eligible payments toward the required 120 payments. I saw an article in XXXX XXXX indicating that other people have encountered similar issues of believing that their student loans would be eligible for student loan forgiveness under the Public Student Loan Forgiveness Program based upon the information provided to them by the applicable student loan providers, which is what prompted me to file the within Complaint. Had I been informed in XX/XX/XXXX, when the administrators of American Education Services and the Department of Education should have been aware of my involvement in the income based repayment plan, that in order to qualify for public service loan forgiveness I would need to consolidate my loans with the Direct Loan Program, I would have consolidated at that time, and there would not an issue. However, due to the poor quality of information available at that time, I would have had no way of discovering this fact until now. I have already spoken to one ( 1 ) former colleague at the XXXX XXXX XXXX who also believed that her Stafford loans were eligible for Public Student Loan Forgiveness but has not consolidated her loans through the Direct Loans Program. As I indicated to Representative XXXX  back in XX/XX/XXXX, obviously many others found themselves in the same situation, which it appears is especially so asXX/XX/XXXXapproaches and many public service workers discover that they are precluded from loan forgiveness because they were not advised that they had to apply for consolidation of their loans through the Direct Loan Program. I thank you so much in advance for your attention to this matter and any assistance you are able to provide to me in this regard.

Company response to consumer: Closed with explanation