Consumer complaint received 2019-05-01
Company: Nelnet, Inc.
State: MD
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with your lender or servicer
Sub-issue: Received bad information about your loan

Complaint:
The webform removed all formatting from my complaint, so I have also attached a copy of this letter for easier reading. 

Complaint : I am writing to file a formal complaint against my student loan servicer, Nelnet , inc., regarding the negligent communications practices that resulted in the accrued interest across all my loans to capitalize and be added to the principal balance. 

In short, Nelnet , inc. claims that the interest was capitalized as a result of my alleged failure to respond to a request for more information from Nelnet , inc. to confirm my repayment plan, when in fact I never received any communications from Nelnet , inc. requesting said additional information. Moreover, despite multiple requests to Nelnet , inc. to produce said communications, Nelnet , inc. is unable to produce same, and refuses to reverse the capitalization. The result of the capitalization of {$23000.00} ( $ XXXX+ {$2600.00} ) will result in {$26000.00} of additional interest across the Income Driven Repayment ( IDR ) Schedule with 174 payments remaining. 

Resolution : I request that the total capitalization of my accrued interest {$23000.00} ( $  XXXX {$2600.00} ) be reversed and deducted from the interest bearing principal balance. 

Interest Calculations : Capitalization 1 : {$13000.00} at 7.9 % Capitalization 2 : {$2000.00} at 7.9 % Interest on this capitalized balance over 174 monthly payments : {$18000.00} Capitalization 1 : {$7200.00} at 6.8 % Capitalization 2 : {$550.00} at 6.8 % Interest on this capitalized balance over 174 monthly payments : {$7.00}, XXXX Timeline : XX/XX/XXXX : IDR plan recertification application submitted. 

XX/XX/XXXX : Receipt Confirmation confirmed by Nelnet, inc. via email. See Attachment,  Figure 1. Note : Nelnet writes that additional requests for information will come via email : We ask that you continue to make any payments due on your current repayment plan until you receive confirmation of the outcome of our review. Also, please keep an eye out for any emails from us, as we may need additional information to complete our review of your application. Email is my selected form of communication from Nelnet , inc . Figure 2. To  date, I have received all communication from Nelnet, inc. via email or text per my communication preferences. 

XX/XX/XXXX : Payment made in full : {$550.00} XX/XX/XXXX : Nelnet , inc. sends electronic letters via my account inbox that my monthly minimum payments has increased from {$550.00} to {$2000.00}. At this point my interest had capitalized in the amount of ( estimated ) {$21000.00}. 

XX/XX/XXXX : Upon reading the communication, I contacted Nelnet, inc. regarding this situation and was informed that the increase in monthly payment minimum was the result of an incomplete IDR Plan Recertification Application. Additional information regarding pay was required. I was also informed that this resulted in accrued interest capitalization. I requested that they reverse the accrued interest capitalization, as I never received the request for additional information. I can not recall the names of the representatives that I spoke with, but I was escalated to a supervisor who I spoke to in length. He confirmed that I should have been sent this communication via email in my secure account inbox, but stated that it was sent via United States Postal Service ( USPS ) mail. I informed the supervisor that I never received the letter. I was put on hold and he checked with someone in a leadership role for guidance and was told that mailing the letter via USPS was  adequate notice, regardless of my receipt. He confirmed multiple times that it was odd that every other piece of correspondence I was sent from Nelnet , inc. came electronically, according to my chosen preference, and could not tell me why this particular request was sent via USPS. He instructed me to submit the requested documentation, and applied a temporary forbearance to my account to allow processing time for the IDR payment plan. 

During this period of forbearance, additional interest capitalized, totaling : {$2600.00} XX/XX/XXXX : I submitted the requested pay information to recertify my IDR payment plan. 

XX/XX/XXXX : Letter received from Nelnet , inc. detailing their justification ( Figure 3 ), which failed to include the copy of the original request for additional information although expressly stated in the letter. I submit this as continued evidence that the attention to detail regarding physical mail correspondence from Nelnet , inc. is negligent and that they still can not produce evidence that they ever sent the request for additional information.

Company response to consumer: Closed with explanation