Is your loan being serviced by AES? American Education Services, aka AES, is a loan servicer to millions of borrowers. AES Services many Federal Family Education Loan (FFEL) Program loans, but they service private loans, too. Many of the private loans they service are owned by National Collegiate Student Loan Trusts.
It’s quite possible you have an FFEL Program loan if you have federal loans serviced by AES. The FFEL program ended in 2010, however, and all federal loans are now issued by the Department of Education’s Direct Loan Program.
Even though no new FFEL Program loans are being issued, they will need to be serviced for many years to come as people pay them back, hence the existence of servicers like AES.
AES and PHEAA
It’s important to know AES is actually part of a bigger company, PHEAA. The Pennsylvania Higher Education Assistance Agency also operates as FedLoan. So, while AES and FedLoan are separate components, they are both part of the much bigger PHEAA.
And PHEAA has been in the news lately. The Massachusetts attorney general’s office is suing the company over alleged unfair practices. PHEAA is also caught in the middle of a dispute over documentation of private loan ownership with the Consumer Financial Protection Bureau, National Collegiate Student Loan Trusts, and other companies.
For context, National College Student Loan Trusts are entities that buy private student loans from financial institutions and pool them together. PHEAA is claiming no responsibility in the matter, since they are simply the servicer, not the owner.
Still, given the controversy, perhaps it’s not complete surprise that borrowers with loans serviced by AES have made some public complaints. While AES claims a high standard of customer service, their customers may not always agree.
Many of these complaint narratives are found in places like Consumer Financial Protection Bureau and Consumer Affairs. We took a look to get a better idea of what’s happening with AES borrowers.
Note: If you're having an issue with AES, you can also file a complaint with the student loan ombudsman.
A big theme: bad communication.
False Reporting As Faulty Communication
In the comments we read, the problem of false reports to credit agencies kept popping up. This is scary because a false item on your credit report can drag down your credit and ruin your chances at an apartment, a car loan, a mortgage, or even a job.
Removing these false reports can be difficult, too. Some borrowers seemed to be playing whack-a-mole with bad information on their credit reports.
We don’t know the reasons for these flawed reports to credit agencies. But we do know they are an example of bad communication on the part of the servicer.
Here’s a sample of what we found:
Then, there’s the ultimate bad report: a loan you never took out. Here are a couple examples of that:
Sounds exhausting. Both the financial and emotional toll from spending weeks, months, and even years trying to set the record straight about a false report on your credit is enormous.
Communication Breakdown With Borrowers
What about when you receive bad information straight from your servicer? Communication through customer service is a big part of loan servicing. Failing to communicate important information to a borrower is an obvious mistake by a servicer like AES, but communicating wrong information is just as bad, if not embarrassing.
Here’s what we found:
- A borrower stopped making payments on their loan, and AES failed to reach out to the co-signer. After five years, during which interest continued to accrue, AES finally spoke to the co-signer, who informed them that the borrower had died. The co-signer then started making payments on the loan. End of story? Not quite. AES keeps asking the co-signer for the deceased borrower’s contact information.
- Another borrower writes she decided to pay back her loan in full to get it off her plate. After she paid via a phone call, she was given the impression the whole balance was paid. AES continued to send her bills.
- One borrower just wanted access to their payment history and the amortization schedule (or how long it would take for the loan to be paid in full) of a private loan. AES failed to provide either. Another borrower wanted to get a payment history on their federal loan, but AES had not provided it.
- One borrower received a letter that they were delinquent on their payments. They had auto-pay set up with their bank account and had been paying their loan on time for 9 years, so they were confused. AES had suddenly turned off the auto-pay, the account became delinquent, and was reported to the credit bureaus. When the borrower called to rectify the issue, the customer service rep said their account would be reviewed and the credit agencies notified. Nothing happened. Time and time again, the borrower reached out, was promised resolution and nothing happened. The case is marked “closed” on the CFPB website, but again, it’s hard to know if it’s a happy resolution.
- One person wrote on behalf of their daughter who said $10,000 worth of payments made over 17 months had been deemed “lost” by AES. The parent and daughter provided evidence of the payments to AES, including the bank statements showing the date and amount debited to the servicer. Still, AES insisted they did not have any of the money. Despite all this, in order to regain good standing with the loan, the daughter set up a new payment plan. The daughter successfully made one payment, but the second payment was “lost” and the whole issue began once again.
Find Out The Facts For Yourself
Communication is king. If a loan servicer is reporting bad information to outside companies, you lose out. If they are communicating bad information to you, you also suffer.
And annoyance, frustration, and embarrassment come into play when they keep telling you things you know aren’t true. While these stories are anecdotal evidence from AES customers, they might reflect bigger trends with communication and customer service in the company as a whole.
If you're not quite sure where to start or what to do, consider hiring a CFA to help you with your student loans. We recommend The Student Loan Planner to help you put together a solid financial plan for your student loan debt. Check out The Student Loan Planner here.
Have you ever dealt with any of these issues with your student loan servicer?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.
Editor: Clint Proctor