The student loan manager who angers borrowers – NBC Chicago

For so many student loan borrowers, paying off large loans means going after years of disciplined payments to a loan officer who monitors the loan balance. But for a select group of professionals, those payments are exchanged for something so difficult to deliver: 10 years of public service.

Promulgated into law in 2007, the Public Service Loan forgiveness program (PSLF) is a lifeline that allows new graduates to give back to their community while getting full forgiveness on their loans.

For Chicagoans Ann Wysock and Mike Leavitt, the PSLF program was a means to an end. Their combined student loan debt of some $ 400,000 would have been intimidating in any profession.

Wysock and Leavitt, who earned a doctorate in physiotherapy, reflected on how long it would take them to pay off their loans as they both entered their chosen field. They said a counselor recommended the PSLF to them at their school and the young married couple chose to participate.

Now the couple think PSLF is a program that looks great on paper, but in reality, it was a nightmare for them. Their responsibility lies with FedLoan Servicing, the loan manager chosen by the US Department of Education to oversee the program.

“The mental angst caused by all of this was pretty significant,” Wysock told NBC 5 Responds. “When we found out that everything they had told us from the start was not true, the emotional upheaval was horrific.”

Her husband had even sharper words.

“Rules are everywhere, and they willfully make it hard to follow,” Leavitt said. “People have told the federal government by the thousands to look into this contractor, and they haven’t done anything.”

FedLoan Servicing also operates under its official name, the Pennsylvania Higher Education Assistance Agency (PHEAA). The PHEAA was contracted by the DOE to service the PSLF program starting in 2009 for $ 5 million every five years of service, according to its federal contract signed obtained by NBC 5 responds.

Wysock and Leavitt spoke from experience, each battling FedLoan for months, they said, to wrest proof from the server that they had fulfilled their end of the bargain.

Wysock and Leavitt each said they submitted the required documentation regularly, in rigorous form, for nearly a decade.

“For over 10 years we have submitted with exceptional detail our tax forms, our employment certification forms that they review over and over again,” said Leavitt. “And none of that mattered when it came time to receive our confirmation letters.”

The delays cost Wysock and Leavitt more than just frustration.

Each said they worked longer in the public service than required, but feared resigning should FedLoan decide to deny the request to cancel their combined $ 400,000 loans.

And time was running out. Wysock and Leavitt each found exciting new jobs in their field of work in Scotland, where they had decided to relocate their young family.

As time passed before leaving for their new adventure, the couple said they were baffled that they couldn’t go together, due to Wysock’s unfinished business battling FedLoan.

“When we found out that everything they had told us from the start was not true, the emotional upheaval was horrible,” said Wysock.

Judging by the in line comments of other PSLF participants Submitted to the Consumer Financial Protection Board, among other agencies, NBC 5 Responds revealed that FedLoan may not be doing as well by registered benefactors.

The complaints are so widespread that the state of Massachusetts has lashed out at the maintenance worker, accusing him “failures” that “hurt borrowers”, causing some to lose grants and others to incur additional costs.

FedLoan did not admit any wrongdoing and settled the Massachusetts lawsuit.

In a statement to NBC 5, a spokesperson for FedLoan added that “the vast majority of allegations in the lawsuit were unfounded. is inconsistent with the agreement itself.

To read FedLoan Servicing’s full statement to NBC 5 Responds, Click here.

Back in Chicago, bruised by their battle with FedLoan, Wysock and Leavitt asked NBC 5 Responds to examine how FedLoans treated them and other professionals in the public service.

Leavitt said his loans were eventually canceled and he received a confirmation letter after “countless” hours on the phone with the duty officer for several months.

But Wysock’s case has remained open, with no apparent end in sight.

NBC 5 Responds asked FedLoan Servicing about the Wysock case, but the government contractor did not answer questions, citing privacy restrictions.

But in a day and a half, Wysock got the green light she was waiting for: her loan forgiveness official.

The intervention brought both financial relief and the freedom to fly into their new life together for this family. Their gratitude is further punctuated with concern for others who rely on the PSLF program.

“Accountability just doesn’t exist for these service providers, and they manage billions of dollars,” Leavitt said. “It is unacceptable that an organization tasked with managing so much money in a time of a global pandemic when many healthcare professionals like us who work on the front lines are putting our lives at risk.”

In July, FedLoan Servicing stunned the lending community by announcing that it had no plans to continue working for the Department of Education. The entrepreneur has been behind the civil service loan forgiveness program since 2009. Now his current contract expires after December 14, 2021.

“What made commercial sense in 2009 in relation to supporting our public service mission no longer makes sense today”, a declaration from the entrepreneur reads in part, adding that he “will continue to fulfill his responsibilities … for the remainder of his contract, and beyond if necessary, to ensure borrowers have a smooth and manageable transition.”

When FedLoan made the contract announcement, Rich Cordray, chief operating officer of Federal Student Aid (FSA) at the Department of Education, sought to reassure PSLF and TEACH grant borrowers of a smooth transition.

“As the current PHEAA contract expires in December 2021, they have agreed to continue working with the FSA until all borrowers have been successfully transferred to another loan department,” the Cordray statement said. .

The Consumer Financial Protection Bureau said borrowers can expect Department of Education notices notifying a new loan service. (For more on the upcoming process, Click here.)

In the meantime, millions of borrowers have been plunged into heightened uncertainty about which way to go.

Do you have a consumer complaint? Call 1-844-NBC-RESP or let us know, so NBC 5 Responds can help.