FedLoan mistake help! My fool's errand

[Anonymous]

I spoke with a rep back in 12/2017 who told me about the modified IBR plan, which made my payment over $100 cheaper than the IBR plan I was already on. I submitted my application before my March, 2018 recertify deadline. I wasn't sure that I did the correct application so I called. I do not recall the details/reasons (I assume I did the incorrect application = my bad) but I had to submit another application for the modified IBR.  On March 31st I received notice that my application was denied and I had a large bill.  I described situation up to that point and rep said that she did not show where the $5.00 bill had been generated, thus never sent resulting in the application denial. She resubmitted the application for review, said she would take care of the bill & place me on forbearance, and said that I should receive the $5.00 bill within 20 or 30 days. I received a notice regarding my repayment terms but no bill for $5.00. I went online and scheduled my first payment for 5-10-18 (due date was 5-16-18). On May 9th I get another notice saying that my IBR request was denied. I call again, give the run down and tell her I received payment terms, setup payment to be made 6 days prior to due date, but that I had not received the $5.00 bill. She said did not see the $5.00 bill in the system so she resubmitted it for review, said she would take care of the bill, and took my $5.00 payment over the phone (why couldn't they have done phone payment first time there was issue...beside the point but whatever). I get notice today that I have a past due balance. Last week it was a little over $1k and today it's over $2k. I opted for chat room (see below transcript...I was losing my patience but I tried to be nice).

My position is that from the time my application was denied because FedLoan didn't send me that ridiculous $5.00 bill, the high amount I was billed should not be capitalized. Anyone have any suggestions or been in similar situation? Do I just leave it alone and eat the $3-4k that is being capitalized. Oddly enough I'm actually more concerned about any late payments reporting because it's nearly impossible to get FedLoan to fix and/or remove late payments. 

Tabitha: Thank you for contacting FedLoan Servicing! My name is Tabitha and my employee ID is 610673. May I have your first name please?

ME: [me]

Tabitha: Hello, [me]! How can I assist you today?

Tabitha:

Right now, your account is currently past due by 32 days for $2,153.34. We also report the status of your loan(s) to the consumer reporting agencies each month.

Let’s see what we can do to resolve this delinquency.

Can you make a payment today to bring your account current, or would you like me to provide alternative repayment or postponement options, if any are available?

ME: The "Current Payment Due" keeps changing. There were issues with the repayment plan, which has since been resolved. The last person I spoke with said she was capitalizing the balance since I am unable to pay but my account is still showing a high payment due. ??

ME: I spoke with Janette last week and at that time my account was showing a balance of $1,269.14. That is the amount that she said she was capitalizing. And not it changed to $2,153.34. It doesn't make any sense.

Tabitha: I am currently working on your request, sorry for the delay.

Tabitha: A request was submitted on May 10, 2018 to deactivate your Reduced Payment Forbearance bill due on March 16, 2018. Please allow up to ten business days for the processing of this request.

ME: What does that mean? What happens with the amount that is shown due? And why was my amount due $1,269.14 last week and now it's $2,153.34

Tabitha: I am currently working on your request, sorry for the delay.

ME: This is all a mess because FedLoan failed to send me the bill for $5.00 for the repayment plan so it got denied.... because FedLoan did not send me the bill. So now, through no fault of my own, I am having payments capitalized so my principle is going up.... all because FedLoan failed to send me a bill for $5.00. This needs to be fixed ASAP before it negatively impacts my credit. I would also like someone to tell me how I can go about getting the interest written off that recently been accrued since FedLoan messed up my initial repayment request.

Tabitha: The interest amount due on the Reduced Payment Forbearance bill will capitalize (be added to the principal balance) of your loans once the bill is deactivated.

ME: I would like that to be fixed also. I'm being penalized because FedLoan didn't send me a bill so the application had to be redone. I don't understand why a mess up on FedLoan's part is detrimental to me and costing me thousands of dollars. What do I need to do or who do I need to speak with?

Tabitha: I am currently working on your request, sorry for the delay.

Tabitha: Unfortunately, once the interest is capitalized we will not be able to reverse the capitalization.

ME: FedLoan's mess up dates back to March. So that's two months worth of however much money that I would've never been billed had they sent me the $5.00 bill. The woman I spoke to in the beginning of April said she saw that the $5.00 bill was never sent out so she did something to reprocess and said that I would receive the $5.00 bill within 30 days. I never did, once again, but I did get the repayment terms and made a payment last week and called because the amount was due high. Janette P613140 said that it was being denied again for same reason so I paid the $5.00 over the phone and it appears that the repayment plan has been fixed. So my only issue now is what is currently showing due and also the interest that has accrued because FedLoan screwed up.... not me!

Tabitha: I am currently working on your request, sorry for the delay.

ME: Am I making any sense? Because if I am explaining it right, then as a reasonable person, you would see where seems that something is off about me having to capitalize interest that I have been billed since March due to FedLoan not sending me a simple $5.00 bill.

Tabitha: I am currently working on your request, sorry for the delay.

ME: My inability to make high payments is one thing. I'm saying that had I been sent the $5.00 bill back in March, my repayment plan would have been in effect and I would never have been billed the high payments and the interest would not have been accruing.

Tabitha: I am currently working on your request, sorry for the delay.

Tabitha: Please accept our apology for any inconvenience or confusion that this situation may have caused you.

ME: Who do I need to speak with about FedLoan's mistake not costing me thousand of dollars added to my principle?

Tabitha:

You may call our toll-free at (800) 699-2908 to reach our Customer Service Department, which is open Monday through Friday from 8:00 AM until 9:00 PM (ET).

ME: What is being done about the situation so this doesn't negatively impact my credit?

ME: So you're unable to help me?

Tabitha: I am currently working on your request, sorry for the delay.

Tabitha: Please be advised Reduced Payment Forbearance bills will not effect you negativelyif they go past due.

ME: So you are saying that nothing negative (late payment) will report to my credit but that I have to pay for FedLoan's mistake since the interest that has recently accrued will turn into principle?

Tabitha: I am currently working on your request, sorry for the delay.

Tabitha: A Reduced Payment Forbearance bill is consider and Interest bill. The Reduced Payment Forbearance bill should deactivate after 30 days for delinquency and will result in any unpaid interest being capitalized to your principal balance.

Tabitha: The session may time out if you don't respond to this automated prompt. Please reply to this message.

ME: I understand that part. What I am wondering is whether there is anything FedLoan can/will do to remedy their mistake and avoid me having to capitalize interest that would never have accrued had FedLoan not made a mistake. Aside of the negative credit reporting concern that I have, which I believe you clarified and said nothing negative will report, I am concerned about the reasonableness of FedLoan making a mistake and me having to pay for the mistake.

Tabitha: I am currently working on your request, sorry for the delay.

ME: The woman I spoke to in the beginning of April confirmed that she was able to see on her end that FedLoan never sent me the $5.00 bill = FedLoan mistake. She resubmitted my repayment plan request and said that I would receive a bill within 30 days for $5.00. I spoke with Janette last week and she also said that the $5.00 bill was not sent, however, she transferred me so I could make that payment over the phone = FedLoan mistake 2. Both mistakes have resulted in me being billed a higher payments since March that now are being capitalized = Me paying for FedLoan mistakes. Does that make more sense?

Tabitha: I am currently working on your request, sorry for the delay.

Tabitha: Give me a few moments to research your account.

Tabitha: The session may time out if you don't respond to this automated prompt. Please reply to this message.

ME: I think I am looking for a yes or no answer so I don't waste my time or FedLoan's time... Is it FedLoan's position that the interest recently accrued as a result of FedLoan's mistake dating back to March, will be capitalized resulting in my principle balance increasing and that there is nothing I can do or FedLoan will do to remedy that?

Tabitha: I am currently working on your request, sorry for the delay.

Tabitha: Give me a few moments to research your account.

Tabitha: The session may time out if you don't respond to this automated prompt. Please reply to this message.

ME: Waiting on response.

Tabitha: Per review of your Income-Driven Repayment application received on January 16, 2018, a Reduced Payment Forbearance amount was not listed on your application to switch from the Income-Based Repayment plan to the lowest Income-Driven Repayment plan. A request was submitted on January 23, 2018 to begin the opt out process to have the Income-Based Repayment plan removed from your loan and disclosed on the lowest Income-Driven Repayment plan. A Reduced Payment Forbearance was placed on your account from March 1, 2018 through March 16, 2018 in the amount of the Standard payment amount. Since you did not satisfy the Reduced Payment Forbearance in the amount of the Standard Payment we denied your opt out request on March 31, 2018. On April 3, 2018 a request was submitted to review your Income-Driven Repayment application per your request.

Tabitha: Since the Standard payment had not been received to opt you out of the Income-Based Repayment plan the review was denied due to no Income-Based Repayment plan opt out payment had been received. On May 10, 2018 an opt out of Income-Based Repayment plan request was submitted per your request asking for a Reduced Payment Forbearance of $5.00 to opt out of the Income-Based Repayment plan. Since the Reduced Payment amount was received on May 10, 2018 we were able to complete your request and have the Revised Pay As You Earn Repayment plan applied to your account.

Tabitha: During a forbearance, you are responsible for the accruing interest on all of your loans. We'll send an interest notice on the 10th of March, July, and November. These notices will let you know how much interest has accrued on your account. Your account will not become delinquent if you do not pay the interest; however, you can send payments of any amount at any time. 
Although you are not required to pay the accruing interest while your payments are postponed, it will save you money in the long run. Once your forbearance ends, any unpaid interest will capitalize (be added to the principal balance). If you pay all of the accruing interest, it will prevent your principal balance from increasing when you enter repayment. Even if you can only pay some of the interest, it will still reduce the amount that is capitalized.

Tabitha: The session may time out if you don't respond to this automated prompt. Please reply to this message.

Tabitha: You appear to have left this chat, I hope that I was able to help you today. Please re-contact us if you require further assistance.

Tabitha has exited the session.

The conversation has been ended.

[Anonymous]

....it was probably 3 minutes from the time the rep sent me the long responses to the time she ended session. Go figure. 

[Anonymous]

FLS is truly horrible. The chat history is perfect to have what they say in writing but using it to fix something is useless. The same for email. They will give you the wrong answer endlessly. This is why my REPAY application took six months. (Keep in mind, they still profit from the added interest so they could care less. )
The only option that may work is calling them. The first person rarely has answers, even rarer has correct ones. They don't have the power to fix this but they will pretend they do. Tell them your story and stuck with it, then eventually ask to be transferred to a specialist. If anything can be done, these are the people that will look into it.
In the end, I did not get a solution through FLS. I submitted a complaint with the government's Consumer Financial Protection Bureau. I uploaded all documents, bills, names, dates and conversations I had. I explained everything in detail. FedLoan replied ASAP falling over themselves to fix the problem. They fixed my account and credit report. Using the CFPB gets results!
BTW, for any if the income-driven plans, to get the ball rolling I used IRS info but I have it recalculated with my lowest paycheck every year. It assures they lowest payment for a new 12 months.
Another thing is to check for then to place you on the plan with the lowest payment, rather than select one yourself. It might help you to qualify for a plan in the short-term to get some payments rolling that are qualifying payments. Scan and upload is the quickest way to get them to process your application too.
Hope this helps!

[Anonymous]

I’m not kidding when I say this is almost a shot for shot repostment of the same situation I’ve been dealing with for months and months and months. Same convos and correspondences about needing to get in the right repayment plan, sending tax docs, already applied and waiting when Oops a payments due..(Fedloans) “we just need $5, we’ll bill ya”...late notice stacks up...”$5, don’t pay it well bill ya”....I can feel the late notices destroying life waiting for some apparent magical $5 bill to appear..”Oh you can just pay that over the phone”...now the magical $5 bill Keeps being due when My repayment plan terms clearly state $2500 a month. Do I pay the $5 again? Will I be late on the term payment plan? Is this a trick? Will this kick me out of some repayment plan I don’t even know They enrolled me in but they keep filed away in a draw with a big “$5” bill painted on it with the president of Fedloans in the middle instead of Lincoln and when you open it that rap song “I got 5 on it” by Luniz plays? Or will they keep us all in this twisted financial hell puzzle and bit by bit chip away at our sanity, wallets, credit scores and amount of $5 bills in circulation until we pass the curse to our children and we’re free! Sorry I got carried away haha! But seriously that’s where I’m at now because I got tired of calling and chatting, working hard for no gain and Then I got in a plan I could afford but high, have been waiting for this day to start paying and $5 is due on my account when I clearly owe way more. I’m afraid to call because it just starts over or makes something simple more complicated About paying these loans. I’m in PSLF too but they confirmed all that 9/2018 and in the same doc they have it expiring 10/2018. Do I recertify my job every month or year? Did I get kicked out of that too? Is it a mistake? I’m stilling trying to figure out why my repayment application was denied for being “not eligible yet.” It’s never boring I’ll give them that! Some of those folks from Enron must have done some consulting with these accountants because there is no way that i can reasonably believe i have $300,000 in loans at the mercy of people who want you to change payment plans, pay $5 so they can capitalize interest, and can claim they didn’t receive financial documents as why your not in the plan everybody wants in to have the same process repeat over and over again, to us or more likely the next naive graduating class with fresh student loans to capitalize.

Sorry this got long a maybe soap boxey. Hope it’s at least entertaining but sadly true. Thanks

[Anonymous]

Jaggiwired:
Are you me a year ago?? I feel like you're me! First, your rant (hey! If it's funny, is it still a rant? Booooo!) was hilarious. I'm glad you didn't make it even a word shorter. The truth is I think 1) they do so many things that they don't explain it provide an adequate or accurate answer for it's difficult to know **bleep** is every going on 2) there is this constant awareness that at any point you can make a small decision that can cost you tens of thousands of dollars. 3) if they make a mistake you're still held accountable for it and 4) they almost intentionally drive us insane with this stuff because it amuses them.
Back in the TARDIS, go forward to now and I can tell you a few things before I go to sleep.
Good God, I was stuck in $5 limbo for about 3 or 4 mucking months. I was constantly asking, "why is it $5??" and, "can't I just pay it now?!?" I didn't understand where they got this amount from my IDR application. What it turns out triggers this is switching from one IDR plan to another. In my case I selected that they should select the lowest payment plan for me. A miracle, they selected the new REPAYE. Downside is I was on IBR. This triggers a one-time capitalization of interest. To switch you also have to make one payment at the standard repayment rate. Not to panic. On the application it says request a lower payment, as low as $5. No way I'm giving them more than $5, lol! I never got the paperwork for it, like a bill. After getting nowhere with them, I ended up just paying it. Right after, my regular REPAYE payment kicked in, and I got a regular bill. (Or I would have if they didn't mess my account up totally, but that's another story).
Now, when you said you got a not eligible letter. You have to make sure that if you were approved for a change in plan, you make the $5 payment and switch. If you don't make the payment, you didn't switch and you also probably didn't recertify your old plan. You'll get put on the standard repayment plan again. If you every want to recalculate after switching to the new IDR plan, you must select the option to recertify early on the application. I always pick my plan; otherwise I don't believe they will always select the plan with the lowest payment like they're supposed to.
Some advice, if you're PSLF, call and get a qualifying payment count in writing at minimum annually. They can send you one, I have them sent for REPAYE too. Turn all your annual employment certifications in and keep original, signed copies.
As far as then bumping back the application, I think it's just a game they play to make sure you don't recertify on time and it also reduces qualifying payments and you'll have to pay for more months. They reject an application for any reason, valid or not. One of mine was the validity of a digital signature, and said they needed what they were calling a wet signature which is really a wet signature you scan but becomes a digital signature when you submit it electronically.
I email them repeatedly, until they respond with a fake answer to get everything in writing. Phone conversations will be a waste unless speaking with a specialist. Overall, FLS will take you for a ride, you just have to refuse to trust them or give up. And the CFPB can be your friend if necessary.
Anything else I can help you with?