When PSLF first launched, I asked Sallie Mae if I was eligible. I have two FFELP loans and the representative said no. I asked if I could do something to become eligible, and they said no. I was bummed, but figured I just had to make peace with it. It never occurred to me to question what I had been told, until this week. When I found out I could have consolidated to a direct loan five years ago (approximately four of which I worked at a not-for-profit), I asked Salle Mae to give me their record of my calls. After a long time on the phone, and being referred to a supervisor, I was told that unless I knew when the call was, they couldn’t help me and suggested I write a letter to their consumer advocate/legal department.

With or without documentation of being given bad information, is there any way to right this?

Going forward I will explore my options, but 1) chances are, at this point, I have too few payments left to benefit from PSLF and 2) it is devastating to know that I am losing a possible downpayment on a home because I listened to a professional’s wrong information.

Hi Tzvia,

Loan servicers are notorious for giving out erroneous information. I don’t know if it’s due to lack of training, or the complexity of student loans. I’ve learned you cannot take their information for granted. Unfortunately, I’m not certain that there is anything that you can do. Even if you had a phone recording of your conversation, it would require legal action to get anything done, and at that point it might end up costing you more than it’s worth. What will happen is that even if you get Sallie Mae to concede, your loans will transfer to Fedloan Servicing as they are the ones who will count your PSLF payments. Then you’ll have to prove to them that Sallie Mae did something wrong, and it’s up to them to count your payments or not. I’ve had a scenario where I was told by someone high up at Fedloan Servicing that when my consolidation was botched due to their error and I was showing duplicated loans, PSLF payments made towards the consolidation should count towards the loans outside because they technically were still “in” the consolidation. Note the keyword “should”, because in the end they were never counted, citing how strict they must adhere to federal guidelines. Even with proof of the conversation, and getting the ombudsman involved, I got nowhere, and mounting up a lawsuit was going to cost me more than I was fighting for.

If your state allows, record all of your phone calls with your loan servicers. It might help if you really need proof a conversation took place. There have been stories of people being erroneously placed on a non-qualifying payment plan, and being credited for many years of payments, but it took many years to fix (see elsewhere on this forum), as their original loan servicer had to admit the mistake, and fedloan servicing had to admit the mistake, and the loans in question were already qualifying loans. If you consolidate, it resets the clock, and I can’t see Fedloan servicing willing to apply past PSLF payments to a newly created loan considering how strict they are. You can try the Ombudsman’s office to see if Sallie Mae could dig up a record of your conversation, but as I’ve seen with my experience, it’s a long uphill battle. But do the math and see if it’s still worth consolidating. Keep in mind that your interest will be slightly higher when you do so, because they always round up 1/8 of a %. It’s might be worth it if you have variable interest rates that are currently low to lock them in place….

i’ve said it before and will say it again: when oct 2017 rolls around, if PSLF even still exists, we need a class-action lawsuit. this was rampant, and probably deliberate, and instead of doing what they should do—honoring payments that were in good faith made toward PSLF—they are putting up brick walls. I suggest putting in requests for help to the Dept of Ed ombudsman and to CFPB so we have some documentation. the idea that we have made payments to a specific entity in approximately the same amount but that they “don’t qualify” due to being labeled one thing or another is one that I don’t think would stand up very well in court. but we may have to go that far, and I doubt we can till we are actually denied forgiveness.