Consumer complaint received 2018-07-21
Company: GREAT LAKES
State: VA
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with your lender or servicer
Sub-issue: Trouble with how payments are being handled

Complaint:
My daughter is on XXXX XXXX with the XXXX XXXX in XXXX XXXX. This complaint relates to XXXX XXXX XXXX XXXX XXXX, the servicer of her loans, which the XXXX  has helped pay off through the XXXX XXXX loan repayment program ( LRP ). As a recruitment incentive to encourage my daughter to join the XXXX, the XXXX promised to pay off up to {$65000.00} of the Stafford Loans and PLUS Loans that she and I took out to pay for her undergraduate education. On XX/XX/XXXX of this year, Great Lakes received a payment of approximately {$9000.00} from the XXXX XXXX LRP. This was the XXXX XXXX 3rd and final annual payment, my daughter having completed her third year of XXXX XXXX in the Spring. The simple task for Great Lakes to carry out, as I explained to them clearly and repeatedly involved 2 easy steps : First, pay off the then-outstanding balance of my PLUS loans for my daughter. After several phone calls, Great Lakes finally got that step correct.

Second, I directed Great Lakes to apply the entire remaining amount of the XXXX XXXX payment to my daughter 's account for her own Stafford Loans. Great Lakes has not yet done this and now flatly refuses to so. Instead, they first applied the remaining amount to 2 other accounts of mine that are clearly not eligible for LRP payments ( they are for my daughter 's siblings ). Then, even after multiple phone conversations with them, and written instructions to them, Great Lakes applied only about half of the remaining amount ( instead of all of it ) to my daughter 's account and RETURNED the rest to the XXXX, somehow believing that the XXXX had overpaid them by that amount. Great Lakes did this without notifying me that they were going to do so, let alone getting my agreement to do so, and in direct contradiction of the instructions that I had repeatedly given them and that they had explicitly agreed, in multiple phone conversations, to carry out.

When Great Lakes advised me that they had erroneously returned these funds to the XXXX, they also asserted that they would try to stop payment on that action, but they advised me a few days later that they had been unable to do so and that, at that point, there's nothing whatever that they can do because ( in essence ) they're too big and too complicated to do something as simple as correcting an error that they, and they alone, had made. They refuse, for example, to even contact the XXXX  to get this situation rectified and they insist that our only recourse is for us to ask the XXXX  to make another payment to Great Lakes ( with no guarantee that they would apply that correctly either ). This seems outrageous and indefensible to me, particularly in light of the clear and simple instructions that I provided Great Lakes on multiple occasions, and their repeated assurances that they would apply the XXXX XXXX payment correctly. I have talked to at least 7 Great Lakes employees, including 1st and 2-level supervisors and a so-called military affairs " specialist '', and it is clear to me that further conversations with them would be pointless.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation