In short, my problem with Fed Loan Service providers is they have failed to count payments I made on time and in good faith through their own incompetence and/or through the incompetence of the loan provider who originally serviced my loans back in 2008. They tell me that it is a regrettable mistake on the part of that previous servicer (ACS Direct Loans) which they cannot rectify.
• Fed Loan alleges that payments I made between March 2009 and January 2010, $5874.55—a total of 11 payments do not qualify for Public Service Loan Forgiveness. They say that these payments do not count because they were under a 30 year standard repayment plan. I believed that I was making these payments under an Income Contingent Payment plan. I also repeatedly asked loan providers throughout this time if I was making qualifying payments. When they weren’t completely ignorant of the upcoming PSLF program, they all assured me that I was doing the right thing.
• Finally, Fed Loan is completely unaware of the first two payments I made on my student loans in January and February 2009, another 893.80 and two more months of service that were completely missed due to poor communication and the constant shuffling of my loans between loan providers.
I have documentation that shows I have made all of these payments. At no point was I ever aware that I was making wrong payments—I have no idea how Fed Loan has my payments counted as a 30 year standard repayment when I believed I was making an Income Contingent Repayment.
The key mistake here I believe was made by my former (now bankrupt) loan provider—ACS. I have documentation showing that I applied for Income Contingent Repayment from the Department of Education but at no point did they ever inform me whether I needed to take further steps to receive an Income Contingent Repayment plan. These people instead placed me on a 30 Year Standard Repayment Plan which I was not aware of, a loan plan which Fed Loan is currently using against me to deny me of benefits which I have earned through over a year of working in a low-income school.
This, again, was an error of either Fed Loan or my previous loan provider (ACS Direct Loans—now defunct and bankrupt). At no point did I ever make late payments and if they were not counted it was because these loan providers incompetently failed to count payments I made.
Clearly, my application from September 2008 shows I intended to take a track towards Public Service Loan Forgiveness and it also shows I clearly desired to sign up for Income Contingent Repayment. Why would I make payments amounting to over $6,700 if I ever thought these would not count for PSLF? Indeed, these payments which I made were in fact higher each month than any of the other (qualifying) payments I made. So not only was I paying more on my student loans, but I am also being told they don’t count? How absurd. And why would these people take my money when I informed them repeatedly that I wanted to be making qualifying payments for PSLF? Why would I make payments for 13 months—over a year of my life for nothing?
Please help me not be the victim of someone else’s mistake when all along I have had the best intentions and have gone out of my way to document and follow all steps/rules along the way.

U need a lawyer and not amateur help

I agree with JennaF. While the ombudsman might be able to convince them to change otherwise, they will not enforce them to make a change if they refuse. I encountered an error where a FedLoan servicing rep told me my payments “should” count while my consolidated loan was bungled, but after everything cleared out they determined it didn’t count. Ombudsman couldn’t bend their arm any further. You can try the ombudsman, and it might help at least to get the two January and February 2009 payments to count…but unless you have some paperwork stating confirmation that you were placed on an income based plan, I’m not sure that there is much you can do…. Lawyer would be the only option.

I have the same exact problem, except my original servicer was called “Direct Loans.”  My first nine payments apparently do not count, and I too have documentation that I registered for the correct program.  I have contested this over and over, with no results.

I am a lawyer.  Do you know others with this problem?  I would like to know how many of us there are.

Direct Loans clearly did this as a matter of course. My entire history of payments since oct 2007 does not count and I am hesitant to change now. I think this goes to court, but I doubt it can until we have actually been denied forgiveness (and not just told we are ineligible).

maryannemen - 08 August 2015 08:49 AM

I have the same exact problem, except my original servicer was called “Direct Loans.”  My first nine payments apparently do not count, and I too have documentation that I registered for the correct program.  I have contested this over and over, with no results.

I am a lawyer.  Do you know others with this problem?  I would like to know how many of us there are.

i have it, and have had 0 luck going through Student Loan Ombudsman and FedLoan servicing with it, and from reading these forums for a while, believe there are many of us. also see this story that just came out today and that quotes Heather Jarvis:

http://www.truth-out.org/news/item/32704-we-have-a-massive-student-loan-forgiveness-program-why-is-it-so-complex

the story says that IBR was not even available until 2009, despite my having been told repeatedly by Direct Loan that my plan (whatever it was) had been created specifically to qualify for PSLF. I believe this is a massive problem and this site seems like the best place to gather information about people who have been affected.

I am considering going to CFPB next when the Ombudsman finally fails—maybe they can intervene in some way.

I am currently really unsure about what to do with my outstanding loans that I have now paid almost no principal on for 8 years. Should I convert to IBR, thus in some sense “admitting” that I know my current program does not qualify? or go into full repayment, which pays it off in 10 years anyway, and eat the $12,000 or so I have paid for nothing for the past 8 years?

this has been a terrible burden on my life and I wish to god I had understood that back in late 1980s/early1990s when i took these loans and never taken them at all.

Well, I never thought I’d find anyone in the exact same sinking student loan boat, but PSLFury, we must have talked to the same Direct Loan Customer Service Agent back in 2007.  I too just found out that my last eight years of payments do not qualify because Direct Loans put me on the wrong repayment plan.  Why else would I have consolidated to their company…at a higher interest rate!!!....than to take advantage of PSLF.  When Direct Loans went under in 2012, my service provider became ED Financial.  They have a record of me calling to ensure that I was in a PSLF repayment program.  Now in August, I get switched to Fed Loan Servicing and for the first time in 8 years have been informed that the Standard Repayment Plan didn’t qualify because my loans were consolidated!  So, I called ED Financial and they still maintained that I was in the right repayment program…until I talked to their legal department.  Now all of a sudden they’re calling it an “agent training issue.” 

My loans were taken out for law school and this smells to me like a class action. I’ve heard too many stories like ours.  I’ve called the Ombudsman, my Senator (Dick Durbin) my Congresswoman (Jan Schakowsky) and now I’ve come here.  I say we try and collect as many names of people as possible effected by these negligent loan service providers and start forming our class!

I am in the same boat. I have 8 payments from 2012 that are not counting because of Direct Loans. My husband and I have talked about filing suit over this issue. While 8 payments may not seem like a lot to some people, it does make a difference.

I contacted the Omsbudsman, and finally got an answer why the payments didn’t count. Apparently, when Direct Loans was closing, they put me in deferment, without my knowledge or permission. At that time, my payments were $0 so I didn’t not realize what had happened.

I have actually had success through the Ombudsman and Fed Loan Servicing with my problem of being placed in the wrong repayment plan!!!

Now, I am lucky. I kept good records and I actually possessed a voice recording of a customer service representative from my former loan servicing agent before Fed Loan Servicing, ED Financial, telling me that my 30 year Standard Repayment Plan was a qualifying plan for PSLF when in fact it was not.  Only the 10 year Standard or IBRs are qualifying .  That recording was made even after Fed Loan Servicing told me that I had been placed on the wrong plan.  It is an issue ED Financial is now “addressing in their customer service training.”  DAMN RIGHT!

Anyway, so after the Ombudsman called to tell me there was nothing she could do for me, I requested a letter informing me of that fact.  I wanted it in writing to show that I had gone that route to no avail.  I was gathering my paperwork necessary to file a lawsuit.  (My student loan was for law school after all.)  I believe this lawsuit could have been a class action even.  There are far to many of us out here that were either intentionally or negligently misinformed. 

Then, I got a call from Fed Loan Servicing.  They offered to recognize my payments as qualifying under two different scenarios.  (1) I pay the difference between what I was paying for eight years ($560) and what I should have been paying ($920) in a lump sum to bring me back to even, and then continue to pay $920 for the rest of my payments (24), and the remainder would then be forgiven.  OR option (2) was they would take the amount I’ve paid on the loan and recognize that amount for the number of payments that it would have constituted.  In my case, the $560 I was paying for 96 months added up to 51 months of $920 payments.  So, I would get credit for 51 payments and have 69 left at $920.

I have not made my decision on what option to take, because it turns out the amount I owe would be completely paid by the end of the months in either scenario.  Essentially, I’d be forgiven about $3000 at the end of the day.  Ultimately, what I would have done had I been advised correctly eight years ago is refinance with a private agency at a lower interest rate and pay the loan privately.  As we are all painfully aware, the government charges astronomical interest rates (in my case it was 8.25%).

But, at the end of the day, there is light at the end of the tunnel on this issue.  If you find yourself in this boat, and one of the two plans above would be beneficial to you, request it.  During the questioning of my representative from Fed Loan Servicing (not the Ombudsman), this sounded like a plan to deal with this problem universally and not something specifically crafted to calm the hysterical lawyer girl!

Good luck everyone!

Oh, and I forgot to mention, I had called and written to my representatives in Washington.  My congressman and senator had written letters (essentially copy and pasted my letters) to Fed Loan Servicing and the Ombudsman.  This may or may not have helped.  Frankly, I think Fed Loan Servicing is recognizing an epidemic of ineptitude with these loan providers and attempting to solve the problem.

I’ve submitted a request for help to the “Ombudsmen Group” and will update here if/when I hear back from them.

Like many of you, I was told by Direct Loans to consolidate with them back in 2008 and then was set up on a repayment plan for the Public Service Loan Forgiveness Program and just found out from my new loan servicing company (Granite States) that none of the payments I have made over the past 7 years count and i actually dont even qualify for the PSLF since my loans are consolidated. They said that there is nothing they can do because it happened with their predecessor,Direct Loans, and not them.  I contacted the Ombudsman who just gave me the number of someone higher up at Granite States and am now waiting for someone to call me back. 
Since it seems as if you all have been down this road I wanted to get in touch to see if any formal legal action has taken place or if you have discovered another way to get this resolved - this really is a bunch of CRAP! 
Any help would be greatly appreciated!

All I had to go with was my original loan consolidation application which clearly showed me marking Income Contingent Repayment for my repayment plan request. But because I did not submit a document I did not know existed/or was needed (my income certification at that time), the Student Loan Ombudsman refuses to push my case any further.

What will they do when the numerous other people who have fallen through the cracks find out that all the years and money they’ve diligently paid their loans counts for nothing? And why does no one in power seem to care?