Consumer complaint received 2018-03-08
Company: GREAT LAKES
State: CA
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with your lender or servicer
Sub-issue: Don't agree with the fees charged

Complaint:
On or about XX/XX/XXXX, I contacted XXXX XXXX XXXX XXXX, my student loan server. Originally, I was calling because I had questions regarding how filing jointly or separately with my husband would impact my income driven repayment program. At that time, however, the customer service agent informed me that Great Lakes had placed me on the incorrect repayment plan. Initially, the agent informed me that switching back to the REPAYE program would result in the capitalization of any unpaid interest. After determining that the switch was Great Lakes error, however, I was told that interest would not be capitalized. 

On or about XX/XX/XXXX, I followed-up with Great Lakes to confirm that I had been placed back on the REPAYE program. Unfortunately, at that time, a different customer service agent informed me that Great Lakes had simply updated my PAYE program. Consequently, I was required to re-explain the situation to that agent who, after an hour, assured me that she would switch me back to the REPAYE program. During that time, obviously I also wanted to confirm once again, that I would not be penalized for switching back to the REPAYE program, because it was a result of Great Lakes error. It was at that point, that the customer service agent informed me that interest would not be capitalized as a result of switching me back to the correct repayment program, however, interest would be capitalized because, at that time, they determined that I did not submit my repayment application on time. After reassuring the agent for more than an hour that I had submitted my application on time, which is why interest had previously not been capitalized, she determined I was correct, and again I was told interest would not be capitalized. Further, regarding the above late renewal application, Great Lakes records will show that I contacted them in XX/XX/XXXX and was informed that my renewal application was due in XX/XX/XXXX. In addition, I never received any prior communication from Great Lakes stating that my renewal application was not timely, and thus up to that point interest had not been capitalized. 

On XX/XX/XXXX, I received an email from Great Lakes stating that all unpaid interest had been capitalized. Obviously, this email prompted me to again contact Great Lakes. At that time, I was told that capitalization is the automatic result of switching back to the REPAYE program. That being said, because the capitalization was a direct result of Great Lakes error, they would go back and manually remove all capitalized interest. At the end of this conversation, I was told to follow-up with Great Lakes after XX/XX/XXXX to confirm all capitalized interest had been removed. 
On XX/XX/XXXX, I followed-up with Great Lakes regarding the above. At that time, I was told that Great Lakes had removed less than {$1000.00} of capitalized interest. Remembering that the original total was approximately {$8000.00}, however, I questioned the amount that had been removed. In addition, I referred to my account to confirm the amount was approximately {$8000.00} as of XX/XX/XXXX. It was at that point, that I discovered Great Lakes had changed the interest capitalization dates from XX/XX/XXXX for an amount exceeding {$8000.00} to XX/XX/XXXX for a capitalized interest in the amount of {$5700.00}, and XX/XX/XXXX for a capitalized interest amount of {$1000.00}. It was at this point, I was again told that Great Lakes retroactively capitalized interest as of XX/XX/XXXX because I allegedly submitted my repayment application late. Unfortunately, however, although I again informed yet another customer service agent that I did not file my application late, I was told Great Lakes would not remove the above-capitalized interest. Instead, I was informed they would only follow-up regarding the remaining {$1000.00} that still reflects the XX/XX/XXXX date. 

Clearly, given the above, I am filing this complaint because I do not believe I should be responsible for any capitalized interest currently on my account. With that said, I am also motivated to file this complaint for several other reasons. First, I must believe I am not the only person who, through no fault of their own, has been incorrectly assigned the wrong repayment program. Further, because correcting this issue results in the automatic capitalization of any unpaid interest, I am also certain I am not the only person who now has interest capitalized on their account as a direct result of this accidental reassignment. Second, although Great Lakes had the opportunity to resolve all of the above, they instead decided to take that opportunity to change the source of the capitalization to allegedly filing my renewal application late. An occurrence which they did not determine until this incident occurred. Third, {$1000.00} of capitalized interest which Great Lakes now attributes solely to the switching of my repayment program still remains on my account, and although Great Lakes agrees I am not responsible for this amount, it is unclear if they intend to remove it.

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