Consumer complaint received 2019-12-29
Company: Nelnet, Inc.
State: KS
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:
I borrowed around {$50000.00} for student loans about 15 years ago and now have a principal balance for these very same loans of nearly {$74000.00}. The previous lender, XXXX, rolled unpaid interest into principal every quarter because my minimum payments didn't even cover any of the principal. I believe my current lender that bought these loans from XXXX, Nelnet, does the same thing. My monthly payments were {$530.00} but have now gone up to {$640.00} per month and will only continue to increase. I asked Nelnet during a phone conversation after the loans were sold how much I originally borrowed and was told that they could not provide me with this information. How can this be when I'm expected to pay so much money back? 

I've been paying twice a month because my monthly payments are so high and I'm paid twice per month, on the XXXX and XXXX by my employer. I pay the higher APR loans with the highest principal balance on my XXXX check ( about 2 weeks early ) and do my best to pay the remaining loans on the XXXX, even though I am not paid until the XXXX. On my XXXX due date I was not able to pay early with the XX/XX/XXXX check so I paid the full amount due for all 14 of my student loans on XX/XX/XXXX. Yes, 14 loans. I  then paid the higher APR, higher principal balance loans on XX/XX/XXXX. When I logged in on XX/XX/XXXX to make a payment ( the day after my XX/XX/XXXX due date would have passed ) the Nelnet website reflected that nothing was due for XXXX and that my next payment due date was XX/XX/XXXX so I assumed that the remaining loans were covered by my higher payment on XX/XX/XXXX and that I'd miscalculated ( screen shot attached ). Thinking that any extra payment would apply to principal and that everything was caught up, I made a payment for {$350.00} toward the higher APR, higher principal loans again on XX/XX/XXXX. I emailed Nelnet on XX/XX/XXXX asking why nothing was showing due just to confirm. I didn't hear back. I emailed again on XX/XX/XXXX after realizing I was suddenly past due after showing nothing due until XXXX on XX/XX/XXXX, one day after the loan due date. Again, I did not hear back ( screen shot attached ). I received an email on XX/XX/XXXX showing that the loan was 15 days past due ( screen shot attached ). Now these loan payments are showing past due and any unpaid interest will again be added to the principal balance. I also can not afford to pay an additional {$250.00} on my next loan payment, which will be about {$1000.00} for a month. I believe Nelnet did this intentionally to increase the principal balance even more on these loans. 

There are two other issues I have with these never-ending loans. How was I able to borrow somewhere around {$50000.00} over a two and a half year period without having a job and being a single mom who couldn't ever dream of affording to pay these loans off? No bank would've ever approved me for that amount without having a job, or even 1/25th of that amount. Also, how is my new principal balance continuously increasing, currently nearly {$74000.00} after I only borrowed something like {$50000.00}? How are these companies allowed to roll unpaid interest into principal? How is this legal? The loan balances are already so high that they can not be paid back over less than 30-40 years. They set borrowers up for failure with constantly increasing principal balances and monthly payments so high that it's not an option to pay extra to decrease the principal. My loans will be outstanding until at least XXXX, probably longer. I will be paying these even after I retire. I am paying more for my student loans every month than I am for my mortgage or any other bill. I never even finished my degree at XXXX. I am trying to do the right thing and pay these loans off but will never make a dent the way things are now. I desperately need for interest to be stopped on my 14 outstanding loans and for the principal balance to be decreased to what I borrowed. I'm not trying to get out of paying my loans but I can't even afford to live right now. I have paid more than enough in interest and want to pay these loans off and be done with them.

Company response to consumer: Closed with explanation