I recently consolidated two student loans under Obama's Student Loan Consolidation progam, which allegedly recognized the many problems that borrowers have with student loan payments.
This consolidation program was highly touted by the Obama administration as a friendly and helpful opportunity to resolve student loan issues. Even better, I was promised that my payments would not only be lower, but I would have the added bonus of combining the two loans into one payment (two loans which I could never combine before).
With all of these great promises, I was hopeful about having a financial life again instead of all of my earnings going toward rent and student loan payments.
My two prior lenders, Sallie Mae and the U.S. Federal Government, were always helpful to me in the past and even bought out my loan from a very nasty company called Nelnet, whose prior collection efforts were beyond inappropriate. Sallie Mae and U.S. Government were always at the very least honest and respectful with me and worked with me with hardship forbearances.
However, after several months of making 100.00 payments, "Direct Loans" switched up on me (requesting payments in excess of 500.00/month) and is presently refusing to work with me despite me telling them what I am capable of actually paying. They don't want to hear about what I am capable of paying - this is apparently irrelevant.
I asked if I could opt out of this program since I've been mislead. My prior two lenders were always willing to work with me and understood my extreme circumstances and present condition of financial strain.
The Representative at William D. Ford Direct Loan Program (Direct Loans), whom I spoke to, could care less and told me that I cannot go back to the way it was since I have a legal binding agreement. I guess he never heard of misrepresentation.
I don't think this is what President Obama had in mind when he offered the Obama Student Loan Consolidation program. This is an outrage.
Also, Direct Loans mailed me a forbearance application to sign after telling me via telephone that I would be approved for a forbearance - I would just have to sign it and send it back. I did this and received a "declined" response in the mail dated December 6, 2012.
Direct Loans is just as bad as Nelnet and I want this company to work with me as promised and to stop their lies. Better yet. put me back where I was before.
PLease sign my petition at :
PSA Re: Direct Loans. They are an abysmal, incompetent bureaucracy that engages in regular acts of what may be (and at least what should be considered) consumer fraud. I have been assigned a federal case worker who now follows all my actions with them, I submit all correspondences through my Congressman's office, need delivery confirmation for all my postal mailings to them, make duplicate copies of everything, and have a call into the Attorney General's office as well as a major national newspaper because:
1.) Without any changes reported by me and without my annual proof of income being overdue, they arbitrarily increased my monthly income-based repayments without any justification or explanation to date. My payment amount was supposed to be permanent unless income change was reported. Not a single person at Direct Loans, including supervisors, could tell how the new number was calculated or why.
2.) Before this, they claimed to have "never received" ANY of 6 (that's right, SIX) successive communications from me all sent via different routes - fax, website, and postal mail. One of these was income-based documentation in October 2011 that should have actually decreased my payments. Their lack of "receiving" my income decrease forms allowed them to keep collecting payments from me that were at least double what they should have been under my new income. I gave up after the six failed communications for various matters and was still paying my same amount until recently when they increased my payment, demanded the annual update and claimed I was about to be overdue for my income reporting (see below.)
3.) In August 2011, Direct Loans sent me a letter with all my account and contact info on it, claiming I was overdue for sending in my "Income Contingent Repayment" income info. I was NOT and HAVE NEVER been on Income Contingent Repayment, only Income Based, which is a completely different repayment plan. When I called and asked, a rep told me it was entirely a system error that I was not due to send in Income Based documentation either - mine was completely up to date for another 5 months. 4-5 months later, when I called to check on it again, another rep told me it was "way overdue" and I should have updated it "back in 2009." Keep in mind, I didn't even have a Direct Loans Consolidation account until Feb. 2011 (which required sending in all the income-based documentation at that time in order to have the income-based repayment I've had since consolidating).
3.) Last year's consolidation debacle: multiple Direct Loans employees told me my Health Professions loans were left out of my consolidation without prior notification because they were "not eligible." They were listed right on the Direct Loan Consolidation website as being eligible. When I alerted them to this, they still insisted those loans could not be consolidated, without any explanation for what was written on their website. I called and fought with 17+ people over the course of three months, including supervisors and people in the Dept of Education, before I finally got one random rep that said, "Of course they're eligible." (Her name was Iris, I will never forget her, and she apparently had more brain power than all other reps there combined. She was the only effective one I ever got, and I've dealt with dozens of them by now.) My consolidation then had to be re-done.
4.) Right before that, Direct Loans kept claiming they "never received" payoff amounts from one of my original lenders, even though that lender had it documented in my record that they had sent it weeks earlier. They ended up sending it 3 (that's right, three) MORE times (including by fax) before Direct Loans finally claimed to receive it. The lender who kept having to re-send told me they had this same problem with Direct Loans (and only Direct Loans) very frequently. Because of this delay and the giant Health Professions error, my consolidation didn't go through until February 28, 2011 even though I submitted the complete application on Dec. 15, 2010. I would have saved literally thousands of dollars over those three months, had the application been processed without multiple errors.
5.) I did a (what could be simpler??) online update of my changed bank account # on the Direct Loans website in November 2011. The changed info showed up under myedaccount online instantly. But... a month later, no automatic debit occurred and I was consequently "late" on my payment. They insisted that "no one else" had reported ANY problems with their website and that I must not have signed the electronic promissory note, even though I knew I had...they recommended I repeat the online request. I did. A month later, again, nothing was debited. Direct Loans at that point claimed a.) it takes 45 days to process ( no process time I could find was ever listed on their website) and they WERE having problems with the website. A different rep that same day told me it takes 2 days to process. Both were apparently wrong anyway..."Processing" a simple updated bank account number took literally almost three months...my original submission was on Nov. 19, 2011 and the first automatic debit from that account occurred on Feb. 21, 2012.
5.) Just recently, on January 22, 2011, I got a letter from Direct Loans stating that if my income-based repayment documentation (the one I sent and they "never received" over three months prior in October 2011) was not "RECEIVED" within 30 days of the date of their letter, my account would revert to a standard (non-income based) repayment plan that would literally quadruple my monthly payments. Within about 2 weeks of receiving this, and after much consulting with the Congressman's office, I RE-SENT the forms via postal mail, and faxed 3 copies (one through the Congressman's office, one to a specific supervisor at Direct Loans, and one to their general fax as listed on the forms). A couple days later (which was still almost 2 weeks before the "deadline"), they claimed they HAD indeed received it. HOWEVER, a rep told me because it would likely take more than 2 weeks to "PROCESS" (note: NOT the same as "RECEIVED", which is what their letter stated), I might still get booted to the standard plan with the $2000+/month payments. I'm still waiting to see what happens, as it is completely out of my hands. And all the nasty, horrible rep told me snidely was "Well, I'm sorry you don't like the way our letter is worded." WOW.
6.) In general, through all of these INSANE DEBACLES, I've had "customer service" reps that were either a.) complete airheads ("Oh, really? Hmmmmmm, that's soooo weeeeird. I have NO idea why that happened...it might be because <insert invalid explanation here>) OR they've been downright obnoxious and nasty, INSISTING the problems are somehow (inexplicably, of course) my fault and taking no accountability for their over-the-top screw-ups. Iris was literally the only exception.
MORAL OF STORY: if Direct Loans gives you trouble, don't think twice about filing complaints against them. If enough people do it, maybe something will change. But it's beyond pathetic how they operate now...even the Congressman's office told me they are "at a loss" when it comes to Direct Loans. The worst part is that they're not just causing inconvenience and headaches. They are literally jerking the strings and impacting people's finances and lives with their ineptitude and misdeals. It is completely wrong.
I have been making my student loan payments to Direct Loans for several years with no problems. This month, however, an extra $300.00 charge was tacked on to my bill. I understand that mistakes happen, but what drove me crazy is that it took forever to get the mistake cleared up. I emailed Direct Loans several times and, despite the fact the the mistake was easily documented, the responder kept insisting that I owed the money. When I called, I got the same treatment.
Good news/bad news:
The good news is that a supervisor finally acknowledged the error and removed the charge.
The bad news is the story didn't end there.
When I tried to make a payment for the correct amount, the website seemed to refuse it because it thought I owed more. So, after the supervisor cleared up the mistake, I again went through the motions of making a payment, and this one was acknowledged. So, I thought I was fine. Unfortunately, both payments went through.
When I called Direct Loans, the operator was unmoved by my story, again insisting that any error must be my fault alone. I admit I was the one who made two payments, so maybe this one is my fault at least in part. However, considering the circumstances of the error, one would think that they could work with me. Instead, she told me my only option was to go through a four to six week process of applying for a refund. Of course, the problem is that I have no money left to live on for the next two weeks, so a refund in the distant future won't help me.
I guess I need to borrow more money :)
Anyway, this problem is temporary and ambiguous, so I'm dropping it. However, I'm switching back to paper billing, and after reading the horror stories on this site, I'm keeping my paper records forever.
It's interesting that this site has only a few complaints against Direct Loans, but half of those complaints are quite recent. I wonder if they've changed their style over the past several months.
Back in [protected] I went through a nursing program in San Diego. At the time, I was recommended to pay off both of my loans insead of just one. So I did, with help from family members, I paid off both loans. I even received a letter informing me that the balance was 0 with Direct Loans. Unfortunately, not more then six months later, they told me that I owed on both. They recanted their story after several angry phone calls and then informed me that I only owed on the one. This, even AFTER the representative I spoke the day I made my payment to confirm that they had indeed shown a 0 balance. After a year of agruing with them and going back and forth, they convinced me to repay on both. I started too then stopped, since my paperwork showing the 0 balance has since been lost. I was told by a supervisor from Direct Loans if I could show from the college that my balance is zero they would credit that and close out my account. Now, after so many years later, they are back to square one. They don't even show the payment I made to pay them off and I feel very cheated.I feel like that they should have on record somewhere that shows I spoke to a represenative who told me this that they did indeed receive that payment. ...*sigh* I feel like the headache is beginning all over again.
I have been paying on my default student loan each and every month and I thought I only had one or two payments left. My last statement balance showed I only owed 143.68 and I had mailed $50 which had not been reflected in that balance. I recieved a letter stating my loan was no longer in default and was being sent back to Direct Loans. I recieved a letter from Direct Loans saying that my pay off balance was over $5, 000! I called them to tell them this was a mistake and they assured me that it was what they had on record. I then called the default department and had them mail me a copy of all payment history so I could dispute it. I spent over 2 hours on the phone with Direct Loans and the default resoulution company before finally finding a supervisor that could help me. They told me it was a mistake they had never seen before and somehow my loan had been hanging on their file and it looked like I had never had it in the default department. (I'm not really sure what this means but they assured me it would be corrected.
Two months later and they are still saying I owe $1, 035 in interest that has accurred. When I called to find out how this is possible on a loan that should have a balance of less than $100, (which now they are giving me a balance of $184). They can not tell me where this amount is coming from. I have my account history on paper but they are STILL trying to charge me all this interest! I don't know what to do. I can't afford to keep paying. I'm a single mom with 4 kids and I can not afford to pay this! Default is telling me that I have a zero balance but the people at Direct Loans are telling me they are gettig these numbers from default.
I just wasted another 2 hours of my day today and still nothing accomplished. I asked Direct Loans to mail me a copy of all my account info. I'm sick to my stomach after dealing with these rude supervisors :(
We had consolidated our student loans with Direct Loans for the purpose of being eligible for the 10 year public service loan forgiveness program. After multiple phone calls and conflicting information as to the correct repayment plan for eligibility, we were given incorrect information and told to sign up for the standard repayment plan. One year later when we called with an unrelated question we found out both of our loans were on incorrect repayment plans and that the year of government service and $20, 000 did not count. They were also unwilling to address their error causing us to start our time in service and payments over again. with the previous year being a total wash. WARNING! Be careful and document every detail of every interaction with this company as there is no other choices of loan companies if you wish to participate in these government loan repayment programs.