The problem with the Education Department’s publicly reported figures stems from an annual requirement that borrowers recertify their incomes in order to maintain eligibility for the three income-linked repayment plans. The department’s standard repayment plan requires borrowers to make fixed payments over 10 years. In contrast, the income-linked plans allow them to make payments ranging from 10 percent to 20 percent of their discretionary income over 10 years, if they work for a not-for-profit or government agency, or up to 25 years if they don’t. Whatever is left over is forgiven, sometimes tax-free.

The Education Department’s main loan contractors -- Navient Corp., formerly known as Sallie Mae; Nelnet Inc.; Great Lakes Higher Education Corp. & Affiliates; and Pennsylvania Higher Education Assistance Agency, which is more commonly known as FedLoan Servicing -- are required to alert borrowers a few months before their upcoming annual deadlines, according to department rules.

Contractors are paid, in part, to help borrowers navigate the process. Keeping eligible borrowers enrolled prevents defaults and allows them to fully participate in the economy, freeing up cash they’d otherwise send to the Education Department.

In the 12-month period that ended in October, nearly three of every five borrowers did not recertify their incomes on time, according to the results of a department survey released last week. Their required monthly payments promptly skyrocketed to what they’d be required to pay on a 10-year basis, their loan balances ballooned as a result of capitalized interest, and as many as 15 percent fell behind on their payments.

Nearly a third of the 696,000 borrowers who missed the deadline were forced into forbearance or deferment plans, which delay monthly payments and typically lead to higher loan balances. Another third of the borrowers who didn’t recertify their earnings by the deadline did so within six months.

Most, if not all, of the remaining third -- about 253,000 borrowers -- are likely stuck making higher payments that are not at all based on their earnings. The department still publicly touts them as being enrolled in its income-driven plans.

The department’s misleading figures mask the inability of its loan specialists to keep borrowers enrolled, consumer advocates say. They also paint a deceptive portrait of the income-driven program’s effectiveness, making it look as though it helps more struggling borrowers manage their monthly obligations than it actually does.

The loan contractors specify in their regular reports to the Education Department which of its borrowers enrolled in income plans are making payments based on their earnings and which are not, industry executives said. But the department doesn’t disclose that data to the public.

“It’s a barrier to understanding how these programs are actually shaking out,” said Maura Dundon, senior policy counsel at the Center for Responsible Lending. “The Education Department needs to realize that not providing full and accurate data impacts public policy.”

An Education Department official told The Huffington Post the agency would further clarify its data in the coming weeks, but the official didn’t specify how.

In February, two of the department’s loan contractors said publicly that some 40 percent of borrowers usually miss their recertification deadlines. Matthew Sessa, the deputy chief operating officer at the Education Department’s Office of Federal Student Aid, said in December that some 11 percent of sampled borrowers who were in an income plan as of July 2012 were enrolled in the same plan two years later, even though their required payments weren’t based on their earnings.

“We know that some borrowers enrolled in income-driven repayment plans are having difficulty annually recertifying their income,” Denise Horn, an Education Department spokeswoman, said in an emailed statement. Horn said the Obama administration, at the White House’s direction, was studying ways to better incorporate data from the Internal Revenue Service so that borrowers’ income information flows seamlessly into the Education Department’s systems.

Over a week, Horn repeatedly declined to answer numerous specific questions about the department’s and its loan contractors’ practices. None of the department’s four major loan specialists answered questions about their practices.

A Borrower’s Nightmare

Borrowers stop making payments based on their earnings for a variety of reasons. Loan servicers could give them false information, conduct poor outreach or fail to process their paperwork properly. Borrowers could simply forget to renew their eligibility. Or they could experience enough income growth that they no longer qualify.

What happened to Ellen Weber isn't surprising, according to borrower advocates.

The Denver-based social worker owes the Education Department around $100,000, and applied for Income-Based Repayment in December 2013. She made her first monthly payment of $322 under the plan to FedLoan Servicing the following February.

On Oct. 30, 2014, FedLoan sent Weber an email simply telling her to log into her account. She ignored it, she said, because it didn’t explain what it was about and she didn’t think anything of it. On Dec. 18, Weber received another email. Though this one explicitly reminded her to recertify her eligibility to continue making payments based on her income, it came during the holiday season.

Weber missed it. On Feb. 6, FedLoan told her she’d been kicked out of the program, the unpaid interest on her loans had been added to the balance, and her required monthly payment had shot up. She now owed $1,174.

Weber immediately sent FedLoan her paperwork. The company denied her application, according to Weber, saying it couldn’t tell from her W-2 form what period it covered. Weber sent in her paperwork again.

While she waited for FedLoan to process her application -- a period of time she described as “incredibly anxiety producing” -- she and her husband discovered that the company had been overcharging her over the past year by more than $100 a month. Turns out FedLoan Servicing had been mistakenly basing her payments on her total income, or her earnings before various deductions, rather than her adjusted gross income.

Education Department rules dictate that borrowers’ payments must be based on their adjusted incomes, which are typically lower. FedLoan's mistake is common among the Education Department’s contracted loan servicers. The company never apologized to Weber for overcharging her $1,200 over the past year -- money she said she would’ve put towards the down payment on a house -- and refused to return the money. In fact, when she alerted FedLoan to the error, the company said it was her fault, Weber said.

Keith New, a FedLoan spokesman, declined to answer any questions, about Weber’s case or otherwise. He referred queries to the Education Department.

Meanwhile, despite several frantic calls, FedLoan wasn’t processing Weber’s paperwork fast enough. Weber then got another bill, which said she owed the company more than $2,347.

“I will never earn enough money to make these payments,” Weber said.

In contrast to the two notices she received before her recertification deadline -- one of which simply told her to log into her FedLoan account -- Weber received four emails notifying her that she was late on her payments, and two telling her that her bills were coming due.

“The problem is they do this when they want their money right away,” Suzanne Martindale, a staff attorney at Consumers Union who advises the Education Department on how it should craft its student loan rules, said of the sudden attention paid to Weber.

Martindale herself fell victim to the recertification maze as well. She missed a generic email from FedLoan telling her to log into its website and view a reminder that it was time to provide her tax forms or other documentation of her income.

Since the initial email said nothing about the need to recertify, Martindale ignored it. The next notice she received said her required payment would jump five-fold. After she called FedLoan, the company put her on a forbearance plan while it processed her paperwork. She took screengrabs of her online experience and shared it with the Education Department.

Borrower advocates said the issues uncovered at FedLoan are common across the federal student loan servicing industry.

“This stuff is going on like crazy,” said Delisle of New America. Borrowers whose monthly payments are automatically debited from their bank accounts often suffer a one-time payment shock after missing their recertification deadline that ultimately forces them to fall behind on their other bills, he said. “It’s just a mess.”

Williams, the Washington-area human trafficking specialist, said she didn’t receive any phone calls or emails from her loan servicer, also FedLoan, telling her to recertify her income level. She only received notices directing her to log into her account on FedLoan’s website. She ignored the messages, in part because her monthly payment of $394 is automatically deducted from her bank account and she thought she’d have until the end of tax season to get her paperwork in order.

Williams sent FedLoan her tax return and recertification paperwork on Feb. 27. On March 3, Williams received an email from FedLoan telling her that she would owe $1,053 by the end of the month. She said she panicked and immediately called the company.

FedLoan told Williams that even though her bill wasn’t due for a few weeks, it couldn’t change the amount she owed. The bill had already been processed, FedLoan told her. The company offered her a deferment, which would have simply delayed her required payment, but Williams declined out of fear it would hurt her credit score. She is trying to buy her first home.

She reluctantly paid the full amount, dipping into half of her savings to cover the nearly $660 difference.

(http://www.autoadmit.com/thread.php?thread_id=2852279&forum_id=2#27664816)

However, my reasonably intelligent friend totes didn't and US Dep of Ed autodrafted $1500 from her checking. Not really sure how people can blow off re-certifying...

(http://www.autoadmit.com/thread.php?thread_id=2852279&forum_id=2#27666017)

On Oct. 30, 2014, FedLoan sent Weber an email simply telling her to log into her account. She ignored it, she said, because it didn’t explain what it was about and she didn’t think anything of it. On Dec. 18, Weber received another email. Though this one explicitly reminded her to recertify her eligibility to continue making payments based on her income, it came during the holiday season.

Weber missed it. On Feb. 6, FedLoan told her she’d been kicked out of the program, the unpaid interest on her loans had been added to the balance, and her required monthly payment had shot up. She now owed $1,174."

To be fair she sounds a tad retarded.

(http://www.autoadmit.com/thread.php?thread_id=2852279&forum_id=2#27664944)

Blood boiling with anger at LIBS

(http://www.autoadmit.com/thread.php?thread_id=2852279&forum_id=2#27665395)

lol, fuck.

(http://www.autoadmit.com/thread.php?thread_id=2852279&forum_id=2#27665986)

However, my reasonably intelligent friend totes didn't and US Dep of Ed autodrafted $1500 from her checking. Not really sure how people can blow off re-certifying...

(http://www.autoadmit.com/thread.php?thread_id=2852279&forum_id=2#27666018)

there are plenty of things to complain about with loan repayment and the loan servicing companies, but this isn't one of them.

(http://www.autoadmit.com/thread.php?thread_id=2852279&forum_id=2#27666031)