Consumer complaint received 2018-05-25
Company: Nelnet, Inc.
State: NE
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Struggling to repay your loan
Sub-issue: Problem lowering your monthly payments

Complaint:
To Whom this May Concern- I had my federal student loans previously with XXXX and I consolidated with Nelnet on XX/XX/XXXX with payment of {$380.00} I was paying my student loan on time and was current with Nelnet up until XX/XX/XXXX. My family had some financial hardship and I had to make a decision to place my student loan on a forbearance until XX/XX/XXXX. 

I then saw on XXXX some news, regarding school loan servicers, Nelnet and XXXX, in hot water with multiple complaints with consumers. On the article they had a number for a third party that stated it could help lower your payments. 

I called and it sounded like a great idea. I only had to make 5 monthly payments of {$230.00} and then my new payment would be an estimated {$90.00} for 20 years and then the rest of my loan would be forgiven. I did sign the contract and then cancelled immediately because I felt as if it was too good to be true. 

I called to verify my cancellation and also spoke with a manager that confirmed I was on approved for the Pay as You Earn plan. Basically pay the 5 monthly payments of {$230.00} and then 20 years of $ 90 monthly payments and then the rest of my loan was forgiven. She assured me that this program was offered on StudentLoans.gov. 

Below is the verbiage from the third party welcome letter. 

XXXX, It was a pleasure speaking with you, and thank you very much for taking the time to speak with me regarding your Student loan options. 
We provide assistance to borrowers with federal student loans by helping you navigate the myriad of available programs designed to provide financial assistance. We will guide you through the steps necessary to apply and qualify for your benefits with the U.S. Department of Education. We are dedicated to helping people take advantage of U.S. Department of Education approved Direct Consolidation Loan programs. With these programs some of the benefits include : one lender, one payment, fixed rate, a lower payment and/or possible loan forgiveness. I would be happy to assist you in our prescreening process to determine your eligibility for loan forgiveness & consolidation programs.

For general information, you may view our website at XXXX XXXX XXXX/ For specifics please call me on my direct number ( XXXX ) XXXXXXXX. There is no cost or obligation to determine whether any of these U.S. Department of Education sponsored programs can benefit you. 

Listed below are many helpful links about receiving student loan benefits : XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX : REVIEWS & COMPLAINTS XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX NELNET XXXX XXXX XXXX XXXX XXXX | Senior Loan Advisor XXXX XXXX XXXX XXXX XXXX Office : XXXX | Fax : XXXX XXXX XXXX XXXX The information contained in this electronic transmission, and any attachments, may contain CONFIDENTIAL information. The information is intended only for use by the addressee named above. Any unauthorized use, disclosure, dissemination or copying of the contents of the information and any attachments contained in this electronic transmission is strictly prohibited. If you are not the intended addressee, please notify the sender immediately and delete this message. 

I did reach out to the customer service of the Department of Education and they did take down my complaint regarding the third party agreement that was offered. I was told I could just apply on studentloans.gov in order to try to get a lower payment. 

I did go on and apply on studentloans.gov around the end of last month, XXXX. 

I reached out to Nelnet via messenger today and asked for an update regarding my application. This was her response : " The plan has been processed and your monthly payment is {$500.00} and is effective XX/XX/XXXX. '' " You are on the revised Pay As you Earn Repayment Plan. Signing the application and submitting it is requesting to have the payment recalculated ''. You're interest rate is 6.25 % ''. 

My previous interest rate was 6.13 %. 

According to my account information on Nelnet 's website, my payment for the first year will be {$500.00} and then for the rest of the term it will be {$700.00}. 

The customer service rep did not mention this jump in payment. 

This is not lower than my current payment. I understand that interest accrues till when you put your loan in a forbearance. So, I thought that was why, but I asked her and her response was the following : " No, as only {$110.00} of interest was from the forbearance. '' " The payment plan is based on the income and family size. '' I am beyond frustrated at this point. Why would I want to agree to a higher payment if I was trying to get a lower payment?? It makes no sense that I was not able to agree or decline to the higher payment. 

I would think if a person were applying to an income based repayment plan for the goal of lowering my payment, how increasing my rate and payment makes any sense. 

I told the lady from Nelnet that I would be contacting the CFPB and she immediately said she could try to qualify me for 2 other options. 

One option was to lower my payment to {$430.00} and extend my term to 25 years. It is called the E

xtended Standard Repayment Plan.

The second option was called the Extended Graduated Repayment Plan, the payment starts out at {$330.00}, then {$350.00}, then {$370.00}. the payment increases 15 % every two years for 25 years. At the end of the term my payment would be {$640.00}. 

I wanted to file a complaint because I think this process is very unfair and almost abusive to the consumer. 

Not allowing me to review the new terms and agree or disagree is not okay. 

I feel that including a spouse 's income because we filed jointly and then he or she is not responsible for the loan at any point, makes absolutely no sense. 

If my husband left the picture, I would have to pay this loan myself. Obviously, it would be life change so then I would have to re-apply would probably get a lower payment. 

If something happens to me, such as death, the loan goes away. He isn't held responsible so his income should not be used, in my opinion. 

I also don't appreciate that I can't get a lower payment to what fits my income but people who don't make any money and live off the government ( which also comes out of my checks every month ) can go to school for free. 

I should have had XXXX kids right out of high school and been a single mom so I could have went to school for free. 

This whole process is backwards. I worked very hard for my degree and I will basically be struggling though life financially because I am not qualified for a lower payment to fit my needs. I have XXXX kids and work a full time job. I have a mortgage, car payments, utilities, diaper and formula bills ( no state assistance ), grocery bills, etc. I am not asking for a free ride, I'm asking for some assistance. 

I am asking that someone really re-evaluates the approval process or create a program for individuals who need a plan for that fits their specific needs. My husband does not have any school loans. He was in the military for 8 years. 

Below is my exactly how much I am actually paying towards this loan and all the interest Nelnet is collecting. 

Group Details Loan Type DIRECT LOAN CONSOL Interest Rate 6.125 % Outstanding Principal Balance {$63000.00} Unpaid Fees/Other Charges ( if applicable ) * {$0.00} Unpaid Interest to be Capitalized {$1900.00} Interest Not Capitalized {$310.00} Estimated Interest Accrual Over Loan Term {$25000.00} Interest Paid as of XX/XX/XXXX {$4300.00} Total to be Repaid {$91000.00} Repayment Schedule and Terms Your Group H is in the Revised Pay As You Earn Repayment plan. This repayment schedule is set to begin on XX/XX/XXXX**. 

Payments Regular Monthly Payment Amount XXXX - XXXX {$500.00} XXXX - XXXX {$700.00} Please help!

Company response to consumer: Closed with explanation