Consumer complaint received 2019-10-13
Company: Nelnet, Inc.
State: LA
Product: Student loan
Sub-product: Private student loan
Issue: Dealing with your lender or servicer
Sub-issue: Don't agree with the fees charged

Complaint:
Nelnet capitalized my student loans in the amount of slightly over {$26000.00}, despite the fact that I had submitted the necessary information for my annual IBR ( Income Based Repayment ) recertification. This is the second time they have done this to me after purchasing my student loan debt about two or three years ago. 

I believe that Nelnet complicates and utilizes the IBR annual recertification process in such a way to confuse borrowers and trigger non-compliance within the applicable 60 day recertification period. Thereby forcing borrowers to capitalize their interest, which is then added to the principal of the loan, extending the life of the loan by years, and increasing the amount of payments and increasing their fees as servicer. 

In late XXXX I received my annual IBR recertification request. I began a new job in XXXX, so I had to wait several weeks to get a pay stub and figure out who to ask and how to get it. I sent in my IBR recertification paperwork in late XXXX, via certified mail, and along with my most recent tax returns. Nelnet does not dispute that this was received timely. 

Nelnet next sent me a letter dated XX/XX/XXXX XXXX, a Friday, received in the middle of the following week. In it they requested my spouse 's payroll income, which was supplied at the end of XXXX once that most recent information was available. Nelnet then sent a letter XX/XX/XXXX, stating that my student loans were going to be capitalized in the amount of {$26000.00}. They also demanded an increase of ten times the amount I had been paying on my student loan and damaging my credit. 

I called Nelnet and spoke on the phone for about an hour, working my way up to be told management would call me. I was contacted by a Nelnet Manager on XXXX XXXX, XXXX, who could not then answer my question why if my tax returns and pay stub were mailed in as requested that was not enough information for them and why the supplemental request of my spouse 's income appeared to be unnecessary and redundant ( as it was on the tax returns ). 

I contacted Nelnet on XXXX XXXX, XXXX and received a call back later that same day an was told Nelnet was not going to change its position. I stated that they had the XXXX tax returns which contained the income of my spouse. I was told the manager would look into it and call me back the following morning. 

On XX/XX/XXXX the manager called me again and told me again that Nelnet would not change their position after a conversation with a supervisor and a specialist- that the payroll information of my spouse was needed by the deadline in early XXXX. When I asked if that was the case, then why was I not told that in the XX/XX/XXXX letter or prior to? If Nelnet had already made the decision to capitalize my loans by over {$26000.00}, why was there a request for my spouse 's supplemental income at all? 

The manager did not know and had no adequate response. 

From these facts, and in my opinion I contend Nelnet is abusing the Income Based Repayment process. Nelnet perpetuates fraud upon the borrowers by over-complicating the annual IBR recertification process, limiting borrower information to make informed decisions in a timely manner. 

It is my hope that this can be resolved without the need of federal litigation, extensive discovery and class action certification.

Company response to consumer: Closed with explanation