Hello Heather,  First thank you for this forum and secondly, I appologize if this is a repeat question.

I have been approved for both the PSLF and the IBR payment plan through FedLoan.  Two weeks ago I was given my new monthly payment amount and it was significantly higher than the IBR calculators estimated.  I contacted FedLoan and was told after numerous emails and phone calls, that they are using my full salary as the AGI calculation, not the number listed on line 37 of my 1040 tax form.

Does this sound right to you?  Everything I read shows that this is a known problem with these financial aid servicers.  Any suggestions would be greatly appreciated.

Phil

Phil, 

Sorry you are dealing with this.  You are correct that your IBR payment should be based on your Adjusted Gross Income, not your gross income.  That’s not up to the servicer, although they can require that you document your AGI up one side and down the other.  I suggest that you contact the Student Loan Ombudsman to report this issue: http://www.ombudsman.ed.gov/.  They ought to be able to clear it up.  Let us know how it goes.

Yours,
Heather

Phil & Heather - I am dealing with the exact same issue; I had consolidated loans with Direct Loans and recently qualified for PSLF. My payments tripled now under FedLoan Servicing. While I even made the claim that my current IBR did not expire until the end of July 2012 through Direct Loans with the lower amount (showed proof of eligibility from Direct Loans), they did not honor it. I reapplied for IBR with FedLoan and while it was lower, it was not as low as the IBR calculator estimated. It has been nightmare of numerous calls, emails and unfortunately different answers. I believe my payments should be lower and it is hard to get past the front line staff and has not been possible to talk to anyone processing the IBR documents, only supervisors of the frontline call staff.

While I’m sorry you are dealing with this situation Phil, I am relieved that I am not the only one. Are there others with FedLoan experiencing this problem? Any updates on this? Thanks; I’m really glad I found this forum!

Adrian

Hi guys,

Just a quick bit of advice if it can help.  I’ve been dealing with Fedloan for a while now and find myself outraged at how incompetent I’ve found them to be and how much time I’ve spent trying to straighten out my account.  I’ve stopped dealing with the front line staff on the phone as I’ve been told wrong and contradictory information many times.  I would suggest only emailing with them, or, after you’ve had a conversation, email your recap and the questions that they promised to follow up on.  I’ve also gotten many “we will follow-up on your request within 7-10 business days” emails with no response though, so unfortunately sometimes you just have to be persistent.  Fedloan has twice placed my account on “forced forbearance” while they were recalculating my IBR terms.  I spoke with a supervisor multiple times about this to no avail.  Just a word of caution because the payments I made during those months did not count as qualifying payments.  This is especially frustrating for someone who has a few years of nonprofit work, but only one year of qualifying PSLF payments.

I am so thankful that PSLF exists because it is the only way I can stomach the interest that accumulates on my student loan principal each year.  However, even though my loans are consolidated, Fedloan claims that my subsidized loans have a different # of qualifying payments than my unsubsidized loans.  (They’ve at least acknowledged that this doesn’t make sense; however, after multiple requests, my # of qualifying payments has still not been updated.)  I’ve been working in the same job and have never missed a payment, yet there are months that are just “missing” when I submit my PSLF employer certification.  I recently found out that there are special customer service reps who are trained in PSLF and there is a hotline within Fedloan that you can contact: 1-855-265-4038.  I suggest calling them directly if you are having PSLF qualification issues.  I’ve found those individuals to be far more helpful.  I really hope that Fedloan gets its act together soon because so many of us rely on PSLF as part of our financial strategy while in low-paying employment.  Good luck!

Excellent points, Jennifer. 

Student loan servicing is notoriously bad.  Borrowers routinely deal with mishandling of payments.  Borrowers who have set up automatic payments are assessed late fees when servicers fail to apply payments in a timely manner.  I’d estimate that only about half of student loan consolidations are processed correctly the first time.  People have much difficultly getting account information, are given conflicting instructions, and yes, I’ve heard all too many reports that paperwork was submitted “too early”.  Even when alerted to errors, servicers are slow to correct mistakes.

I recommend that you contact the Student Loan Ombudsman: https://studentaid.ed.gov/repay-loans/disputes/prepare/contact-ombudsman and complain to the Consumer Financial Protection Bureau: https://help.consumerfinance.gov/app/studentloan/ask as well as your congressional representatives.  (CFPB doesn’t have authority over federal loans but I say tell them anyway, it’s all the same servicers).  I also suggest you follow up in writing with your loan servicer.  They tend to respond somewhat more thoughtfully when there is a paper trail.

For more about the huge problems in student loan servicing see:
http://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=311843
http://www.propublica.org/article/student-loan-borrowers-dazed-and-confused-by-servicer-shuffle
http://ifap.ed.gov/eannouncements/110912LSIFedOwnedLoanInitiativesPlanforNovandDec2012.html

Thank you Jennifer and Heather -

Since my intial post, I did end up contacting the Student Loan Ombudsman and received a quick reply and follow up regarding the issue. Once they were aware of the issue, the resolved the IBR repayment calculation and adjusted my payments. I still have questions on my PSLF calculations; so that’s helpful they have a different line. I expressed my frustrations with the Ombudsman and echoed the concerns you had. It helped clarify that particular issue and spead up the process that was going nowhere with FedLoan Servicing after 4 months.