Consumer complaint received 2023-02-27
Company: Nelnet, Inc.
State: NY
Product: Student loan
Sub-product: Private student loan
Issue: Dealing with your lender or servicer
Sub-issue: Trouble with how payments are being handled

Complaint:
I have contacted XXXX XXXX XXXX on multiple occasions regarding two student loans that are serviced through them. The first payment I made to them was on XX/XX/XXXX for {$600.00} ( my regular monthly payment at the time ). {$330.00} was to go to the loan with the lower interest rate and {$260.00} to the loan with the higher interest rate. This payment appeared to allocate the funds correctly with a total of {$570.00} going to the principal for the two loans and {$30.00} going to the interest for both loans.

The following month I had spoken with multiple loan officers on how to go about making an overpayment so that additional money would go straight to the principal and not the interest. I was told by multiple employees that all I had to do was make a single payment that was greater than my regular monthly payment, and that any amount over my regular monthly payment would go directly to the principal. On XX/XX/XXXX I made a payment of {$1000.00} but only {$580.00} went to the principal and {$410.00} went to the interest. Nearly all of the overpayment went to the interest, and not the principal like I had been told multiple times. 

Following this incident I called their customer service again and the loan officer told me that this happened because I didn't make the payment on the payment due date ( the XXXX of each month ). She submitted a special payment request to reprocess my payment but nothing changed. She told me that if I wanted to make an overpayment and have the additional funds go to the principal that I had to make that single payment on the payment due date. 

So, the next month I made another {$1000.00} payment on the payment due date of XX/XX/XXXX. At this point my minimum monthly payment was {$590.00}. Out of my {$1000.00} payment, only {$590.00} went to the principal and {$400.00} went to the interest. There was essentially no change in how the funds were allocated and my overpayment went almost all to the interest. I called their customer service multiple times again and had special payment requests put in. They agreed that there was no reason for my payment to be allocated this way. This time I did hear back about the special payment request. I received an email stating that it had been processed. I immediately checked my account to see how the allocation changed but there were no changes to the allocation. I called customer service again and this time they told me that if I wanted to make an overpayment and have the extra money go towards the principal that I had to make two separate payments on the payment due date. One payment for the regular monthly payment and one payment that would be considered the additional payment and would go straight towards the principal. This completely contradicted everything every other loan officer told me. Every other loan officer stated that if I made two separate payment, the second payment would ago towards my next month 's payment -- it would not be processed as an additional payment.

Due to all of the frustration, this month I decided to pay my regular monthly payment amount of {$590.00} on the payment due date. {$410.00} went to the principal for the two loans and {$180.00} went to the interest. This is clearly inconsistent, as when I made the regular monthly payment back in XXXX, only {$30.00} went to the interest, nowhere near {$180.00}. Upon further inspection, for one of my loans ( the one with the higher interest rate ), {$0.00} went towards the principal meanwhile {$63.00} went towards the interest. For one of my loans, no money this month went towards the principal. It all went towards the interest.

Company response to consumer: Closed with explanation