Consumer complaint received 2025-01-22 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Don't agree with the fees charged
Company: Servicer under contract with Federal Student Aid
State: PA

Complaint narrative:
The United States Department of Educations mission was to ensure equal access to education and to promote educational excellence throughout the United States. One of the primary responsibilities of Department of Education was to ensure the proper administration of the Federal Student Aid ( FSA ) programs authorized by the XXXX XXXX  of Higher Education Act of XXXX ( XXXX  XXXX ), as amended. The Department of Education administered its FSA programs through participating schools to eligible students. Schools that participated in the FSA programs, such as XXXX, were responsible to the Department of Education, and to their students, for the proper use of and accounting for these federal FSA funds. The Department of Education required every school that sought to participate in FSA programs to enter into a Program Participation Agreement with the Department of Education, under which the school agreed to comply with all eligibility, disbursement, refund, and general program requirements. XXXX was eligible to receive XXXX types of federal FSA funds, XXXX XXXX and Direct Loans funds. The XXXX XXXX XXXX XXXX provided financial aid to the most needy post-secondary students who qualified for assistance to meet the high costs of attaining a post-secondary education. Student recipients did not have to repay XXXX XXXX. The XXXX XXXX XXXX XXXX provided similar financial aid in the form of loans, both subsidized and unsubsidized, which, unlike the grants, did have to be repaid by the borrower. XXXX applied for the financial aid and were awarded aid according to their eligibility and need. The grants and loans were eventually advanced to the educational institution in which the student was enrolled.XXXX  submitted requests for disbursement of XXXX XXXX and XXXX XXXX funds, and accompanying data, for its students. The Department of Education disbursed XXXX XXXX  and Direct Loan funds to XXXX in the amounts of approximately {$17.00} XXXX for the XXXX school year, {$21.00} XXXX for the XXXX school year, {$26.00} XXXX for the XXXX school year, and {$23.00} XXXX for the XXXX school year.The Department of Education imposed eligibility requirements on student applicants seeking XXXXXXXX XXXX XXXX A student was required to complete and submit to the Department of Education a Free Application for Federal Student Aid ( FAFSA ), which contained information about the students income and assets. The information on the FAFSA was the basis for determinations about the students eligibility to receive XXXX  XXXX financial aid The Department of Education used a verification process, administered through the participating school, to check the truthfulness and validity of information that a student provided in a XXXX. If a student was selected for this verification, XXXX was required to compare information from the students XXXX with signed copies of the students or his or her parents tax forms. At XXXX, the file of a student selected for verification would contain a completed verification worksheet signed by the student, along with signed tax forms. According to federal regulations and XXXX policy, if the verification process was not completed, the student was not entitled to any XXXX Grants or Direct Subsidized Loans. In such a case, any XXXX XXXX  or Direct Subsidized Loans already disbursed had to be returned to the Department of Education.If a student withdrew from XXXX prior to completing XXXX percent of the course, federal regulations required XXXX to return to the Department of Education, within XXXX days, a portion of the XXXX XXXX XXXX. If refunds were submitted beyond the thirty-day period, XXXX  could XXXX penalties, including but not limited to interest, fines, increased Department of Education XXXX XXXX and ultimately termination from the XXXX XXXX XXXX.XXXX  retained the accounting firm of XXXX & XXXX XXXX XXXX, in XXXX, New Jersey , to conduct audits on XXXX  for XXXX years XXXX through XXXX. XXXX prepared a list of students receiving XXXX XXXX XXXX  from which XXXX XXXX XXXX would select a portion to review. For these years, XXXX XXXX XXXX reported that XXXX complied, in all material respects, with XXXX XXXX rules and regulations. Still, XXXX XXXX XXXX found instances of noncompliance, including findings of late refunds for the award years XXXX, XXXX, and XXXX. Specifically, in XXXX, there were XXXX late refunds, and the Department of Education therefore required XXXX to post {$130000.00} in surety through a letter of credit.The Department of Education advised XXXX that repeat findings of noncompliance could lead to an adverse administration action, such as the imposition of a fine, or the limitation, suspension, or termination of the eligibility of the school to receive XXXX XXXX XXXXThe Department of Education could conduct a Program Review to ensure that a school complied with statutory and regulatory requirements. A Program Review typically consisted of an on-site visit by federal auditors to review student records. The Department of Education initiated a XXXX XXXX of XXXX in XX/XX/XXXX. 

Knowing this School has committed multiple counts of fraud ; which lead to the school closure in XXXX. The Department of Education continue to allow students to be affected by this fraud. This account remain on my credit report. The Department of Education continued to garnish my wages, as well as report fraud to my credit report. Instead of investigating this account. I was directed to apply for student forgiveness, and told you signed a XXXX, so you are obligated to pay these loans back.

Company response to consumer: Untimely response