Lost eligibility to receive any Federal student loans

[policebox]

I hope somebody can help me with this issue, as I'm not sure where to go from here.

I finished an undergraduate degree and graduated in May 2015. As an undergraduate, at least according to the NSLDS, I inadvertantly exceeded the Subsidized Loan limit for an independent undergraduate student ($23,000). However, I did not exceed the subsidized and unsubsidized aggregate loan limit for undergraduate students ($57,500).

In August 2015 I began a PhD program (at another school in a different state). For the 2015-2016 academic year I was awarded a Federal Direct Unsubsidized Loan for $10,250 each semester.

However, when processing my FAFSA for the 2016-2017 academic year, the financial aid office at my school is stating that NSLDS indicates I may have received Federal student loans in excess of loan limits established for Federal student loan programs. "You are not eliglble to receive any Federal student loans at this time. You may regain elibility in the future by repaying the amount of borrowed in excess of the aggregate limits or by making satisfactory repayment arrangements with your studnet loan holder."

I don't actually believe that I overborrowed. I think what has happened is capitalized interest is incorrectly being added into the original amount borrowered making it look as though there was overborrowing. But, whether or not I inadvertantly overborrowed I don't feel matters.

According to all the research I have conducted about the issue, It is the Department of Education's policy under Title IV that "if NSLDS shows that the loan in question has been included in a Consolidation loan, no further action on the part of the borrower is needed because by signing the promissory note, the borrower has agreed to repay any excess loan amount."

In 2001 I obtained a Direct Consolidation loan which included all of the Subsidized loans I have ever borrowered; there was also the Unsubsidized loan component of the Direct Loan Consolidation. Since this was 15 years ago, NSLDS shows all of my loans taken out prior to 2001 (and then consolidated) as paid off; NSLDS shows the two consolidation loans plus additional unsubsidized loans I have borrowed after the 2001 consolidation.

Additionally, last month (February 2016) I obtained a new Direct Consolidation Loan, which consolidated the 2001 consolidation loan with all my new loans. The reason I did this was because I wanted to take advantage of some of the newer repayment options available and because I was tired of dealing with my old loan servicer, Sallie Mae/Navient.

So, according to all the information I can find about this situation, any inadvertant overborrowing of subsidized loans was cured in 2001 by my signing the promissory note for the consolidation. The situation was "double cured" earlier this month by the loans once again being consolidated. However, when I took this information to my financial aid office, they were unmoved to do anything about it and are still denying me access to student loans for the 2016-2017 academic year.

Before my most recent consolidation, I also contacted Navient (my previous loan servicer and the servicer for the 2001 consolidation) about the matter, explaining it to them and asking if I could sign a reaffirmation agreement so that I could regain loan eligibility. Their reply was that "a reaffirmation letter is not required, as per federal regulations, by signing the Promissory Note for your Direct Consolidation Loans, you have agreed to repay any excess loan amount that you may have received."

As you can see, everyone seems to be aware that this is a non-issue and that there is nothing that I need to do, and that I am eligible for Title IV financial aid during the 2016-2017 academic year, with the exception of my school's financial aid office. They've seen my documentation, but just chant the same mantra back at me. What can I do to twist their arm on this issue and get them to behave? Or, is there something I'm missing?

[SCF]

Who have you talked to in the Financial Aid office?  If you've escalated above the entry level case worker, or they aren't letting you appeal the decision then I would reccomend contacting the Student Loan Ombudsman.  It's possible that the financial aid office has its hands tied based on the info in NSLDS, and it wasn't updated correctly as part of the consolidation, or some other quirky situation - the Ombudsman can investigate those type of details for you and advocate for a correct solution.

[policebox]

The person I spoke with was front-line; that's all we as students are allowed to talk to unfortunately. When I went I came armed with letters and documents that say that if the loan involved was later consolidated, then the student doesn't need to do anything and satisfactory arrangements have been made, so that it's a non-issue. She said she'd put in a trouble ticket to have a FA Officer look over the matter. A few days later when I checed my student account, the issue had been cleared from my financial aid holds, so I assumed that it had been resolved. But, when I checked a few days ago, the hold was back in place.

What's frustrating is that all my sources on this say "no further action is needed on the part of the borrower because by signing the promissory note [for the Consolidation Loan], the borrower has agreed to repay any excess loan amount." But I cannot find anywhere in the promissory note that specifically mentions repayment of excess loan amounts. All there is are the generic statements such as, "I understand that this is a loan that I must repay."

[policebox]

Oh, I should add that, after conducting exhaustive research and digging up, in some cases, 23 year old paperwork to verify information, I didn't actually inadvertantly overborrow subsidized Stafford loans while I was an undergraduate. When the original consolidation was done in 2001, $3,800 of Perkins Loans were included. Those get thrown in with the Subsidized Stafford loans as far as NSLDS and repayment goes. But if you subtract those off of the number showing up on NSLDS for subsidized loans, then I was not over the undergraduate borrowing limit.

What's also aggrevating is that the loan amount for the subsidized loans jumped by $5,000 between the amount shown on the 1st consolidation and the new consolidation. I realize this is due to capitalized interest. But interest is not supposed to be used when determining borrowing limits and eligibility. It sounds like a lot of work, but the proper procedure for a Financial Aid officer, when they see consolidated loans on NSLDS is to go into ISIR and the screens on NSLDS that students can't see, then break the loans down into the original disbursement amounts, minus any payments towards principal, add them up, and then use that as the number for determining borrowing eligibility. But my FA Office is lazy. When I saw the girl at the desk all she talked about was how undermanned they were. While I sympathize with that situation, my problems are as equally important as hers, so I'd like them to be addressed.

[Anonymous]

Did this get fixed I have the same issue