American Education Services: Communication With Borrowers Is Lacking

Every month, your loan servicer takes a chunk of change from your bank account. Loan servicers having clear and consistent communication probably seems like a rule. Unfortunately, if your student loan debt is serviced by American Education Services (AES), this isn’t the reported experience from borrowers.

Student Loan Planner® conducted a survey in 2018 asking readers about their experiences with student loan servicers. AES was at the top of the list for being a communication nightmare. The Consumer Financial Protection Bureau (CFPB) and Consumer Affairs have similar reports for AES.

In a 2024 survey about loan servicers, the sentiment remains with one borrower stating, “AES applied incorrect payment amounts, lost paperwork, lied to me about information, and failed to correctly document IDR payments.”

About American Education Services

You can find AES on aessuccess.org. It was established by a much larger company, the Pennsylvania Higher Education Assistance Agency (PHEAA).

It was created to house the Federal Family Education Loan Program (FFELP) for PHEAA. These loans are no longer distributed. But many individuals are still paying them off.

AES now houses FFEL loans, federal student loans and private student loans. PHEAA also owns and operates FedLoan Servicing along with college resources You Can Deal with It and Education Planner.org. In communications from AES, student loan borrowers are sometimes sent to one of these websites for information.

What does American Education Services do?

AES isn’t a lender. Instead, it’s a loan servicer. Its job is only to manage loans. Examples of services include:

• Processing student loan payments
• Offering support and guidance for federal loan repayment programs and payment plans
• Maintaining communication about loan options and the status of the loan
• Determining availability of deferment or forbearance

The loan servicer acts as the middleman between you and the lender. This essential role requires borrower service and care to be at the forefront.

Major complaints about American Education Services

AES handles your money. Therefore, expectations should be held high. However, the complaints about AES all generally circle around communication and processing monthly payments. Below are major issues that continually pop up with AES.

Inconsistent communication and advice

The communication complaints are plentiful with AES. When information is false or missing, this leads to difficult situations for borrowers.

One consumer reported they called in once a month for a full year waiting for an account review result. Even after the account review was complete, they never received any explanation or reasoning behind the decisions.

If you do get an explanation, the answer could be wrong or different every time. Borrowers who reported with Consumer Affairs stated they often got different answers from each phone call. Borrowers have had to double down when talking to AES and check their facts due to communication inefficiency.

Paperwork is a constant chore

Every loan servicer requires certain paperwork. This is especially true when applying or recertifying for a repayment program. Borrowers with AES have constant issues with paperwork being denied or rejected.

One of our survey participants stated, “Every year I have to recertify for the Income-Based Repayment (IBR) option. Every year the DoE [U.S. Department of Education] sends an email when it's time to complete it. Every other servicer processes accordingly. But AES rejects the application every year for some arbitrary reason and then demands I complete the application again. It's obnoxious the amount of extra work they require because they just can't seem to get it together.”

Many borrowers appreciate the ability to upload documents rather than send them in via snail mail to a mailing address. But the rejections being reported by AES services aren’t always valid.

Payments not applied properly

Poor billing and payment communication channels are a third major complaint about AES. The Better Business Bureau (BBB) houses many borrower complaints about payments not being applied properly. Consumer Affairs and the CFPB follow suit with the same issue being reported.

The BBB reports on more than one occasion that payments were deducted from borrowers’ AES accounts and not applied to the student loan amount. They were then called multiple times a day for ‘late payments.’ In other scenarios, payments were made over the phone. A few days later, the money was transferred back to the borrower's bank account.

Missing payments directly affect a borrower's personal finances and their financial health. For example, serious consequences, like a drop in credit score, are long-lasting. That could make it difficult to get approved for a mortgage, auto loan, or credit card. The other complaints are frustrating. But this one is inexcusable.

Long waiting periods to process documents

Lastly, a major complaint regarding AES is processing time for documents and applications.

According to a survey participant, “[AES] automated forms, statements and account changes are terrible, usually delayed, and can take multiple calls to resolve issues.” This individual would get notifications two to three months after changes went into effect.

No one wants to spend hours of time on the phone or sending paperwork back and forth for months. Changes shouldn’t take effect prior to your notification, either. You need to take some precautions if AES is your servicer.

How can you be proactive when American Education Services houses your student loans?

Overall, there’s a lack of resolution to borrowers’ problems. This stems from the underlying communication issues mentioned above. With any loan servicer, keep track of communications and requirements. This is essential to make sure you’re well-represented in every scenario.

Try to put in place these best practices when dealing with AES:

• Ask who you’re talking to and write down their contact information
• Keep records of all documents, including anything you scan in
• Have your account number handy
• Check to ensure you’re paying each month on time using your online account
• Be diligent about reaching out with questions
• Look over your monthly statement regularly
• Keep an eye on your loan balance
• Check your credit report consistently
• Review your loan status online using the NSLDS portal

But even after taking all precautions, you may be to a point where you're considering a new loan servicer.

What are your options for leaving American Education Services?

Dealing with a difficult loan servicer is about as fun as stepping on a Lego. Chances are, you didn’t even choose AES to service your loans. Your student loans were either sold to AES or assigned to AES by the government. Wanting a new servicer is a reasonable request. But it has strings attached.

The federal government can transfer your loan to another servicer — but not by your personal request. It will do this at its own discretion for its own reasons.

The only way to leave a federal student loan servicer is to refinance or consolidate your student loans. Both of these choices will change your loan terms. Options for repayment plans and loan forgiveness programs may go away with loan consolidation. With student loan refinancing, you won't have access to income-driven repayment options or other federal loan program perks because you'll be using a private lender. But you'll likely score an interest rate reduction on top of getting away from AES as your loan servicer.

So, you’ll want to research both of these strategies before making the leap to leave AES.

Consider reaching out to Student Loan Planner® for guidance. We can help you decide if you should stay with AES for federal repayment plans, consolidate or refinance to a lower interest rate.