Wells Fargo student loan issues

I am writing to inform you of a difficulty I experienced with the federal student loan consolidation process, as the problem I encountered has ultimately cost the American taxpayer more money in student loan interest.

In early June 2006, I began the reconsolidation process with North Texas Higher Education Authority. I have used the federal student loan program to finance my undergraduate and graduate education at The University of Texas at Austin, and my loans now exist in 3 groups, as follows:

1. My undergraduate student loans, previously consolidated with Wells Fargo, in the amount of $15,959 - Deferred due to my current status as a student

2. A current graduate school loan (for the 2005-2006 school year) with Wells Fargo, in the amount of $6176 – An "in school" loan, as this is for my current education

3. A current graduate school loan (for the Summer 2006 semester) with EdFinancial Services., in the amount of $2000 – An "in school" loan, as this is for my current education

In order to include my "in school" loans in my new consolidation package, federal law requires that I send a request to each lender to begin making immediate payments on the loan, thus removing the "in school" status. Additionally, these requests must be received by the lender by July 1st of that school year.

In the process of consolidating all of my loans with North Texas Higher Education Authority, this notice was sent to both Wells Fargo and to EdFinancial Services in early June of 2006. Additionally, a copy of this request was sent to North Texas Higher Education Authority to ensure that all parties received a copy of this request before the July 1st deadline.

Last week, North Texas Higher Education Authority informed me that Wells Fargo will not release my loan in the amount of $6176, as this loan is still classified as being "in school." After contacting Wells Fargo about this situation, I was informed by a Wells Fargo customer service representative that my request to begin immediate repayment on my current graduate school loan was never received, despite the fact that both EdFinancial Services and North Texas Higher Education Authority received this notice well in advance of the deadline. Additionally, as the consolidation process began in early June of 2006, Wells Fargo was aware of my intent to move my loans to another financial institution.

Despite the fact that I submitted the required paperwork well in advance of the July 1st deadline, Wells Fargo is not required to release my loan in the amount of $6176, as they fraudulently claim that they never received the paperwork. I find this claim to be a lie, based on two facts: 1. all other parties received the required paperwork well in advance of the deadline and 2. Wells Fargo was aware of my intent to take my business to another bank well before July 1st.

Due to Wells Fargo's unethical behavior, I was unable to include the $6176 loan in my consolidation package, and therefore, this loan is now being charged a higher interest rater. (Prior to July 1st, this loan was charged an interest rate of 4.25%. As this loan was not locked in at a lower rate, the interest rate is now 6.54%, a 2.29% increase.) I believe that this is of particular interest to you, as this loan is a federal Stafford subsidized loan, and thus taxpayers of the United States of America are currently paying the higher interest rate on this loan. In other words, Wells Fargo's unethical behavior is costing the taxpayer more money in student loan interest. This is particularly appalling, especially given that the purpose of this loan is to finance my education, not to allow Wells Fargo to charge the taxpayers more money.

I am writing to you to request your assistance in resolving this unfortunate situation. There are several ways in which this can be accomplished:

1. Contact Wells Fargo and require them to honor my signed request, submitted in early June of 2006, requesting that I wish immediately begin repayment on my current loan in the amount of $6176. This would allow the loan to be consolidated and locked in at a lower interest rate. Wells Fargo can be contacted at 800-658-3567.

2. Change federal student loan consolidation laws so that banks must honor a request that is signed and dated before the July 1st deadline. Wells Fargo has been able to exploit this situation to their advantage by ignoring my request submitted before the deadline and then waiting until after the deadline has passed to address the issue. In order to place the power in the consumer's hands, banks should be required to honor requests signed and dated prior to July 1st.

3. Punish banks that refuse to allow students to transfer loans to other institutions by making the process difficult and cumbersome. Wells Fargo's actions are costing the U.S. taxpayers more money in student loan interest, and this is simply unacceptable behavior for a company that wishes to do business with the U.S. government.

The federal student loan program has allowed me access to higher education, and I am eternally grateful for that opportunity. However, private companies should not be allowed to take advantage of this program for their own personal gain. I appreciate your time and effort in addressing this matter.

Sincerely,

Jason Thibodeaux