Consumer complaint received 2019-03-02
Company: GREAT LAKES
State: FL
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:
I believe Great Lakes intentionally misapplied my monthly payment. 
I have XXXX XXXX Loans. I XXXX Tokens/Loan types. I am currently signed up on an extended level monthly plan of {$870.00}. The {$870.00} payment I make each month is more than the amount of interest that the accounts accrue and thus, should cover the principal accrued for each month, with some left to go to principal. 

It was my belief that the {$870.00} would be applied among the XXXX tokens, with the amount first going to each token 's monthly accrued interest and any excess towards the principals. 

On XX/XX/2019, I made my {$870.00} payment for the month of XX/XX/2019. However, when I reviewed how my payment was allocated on my online account, I saw that Great Lakes did not allocate it properly to Token XXXX. I owed at that point in time about {$22000.00} on Token XXXX. From XX/XX/2019 to XX/XX/2019, I accrued {$130.00} of interest on Token XXXX. Yet, of my {$870.00} monthly payment, only {$18.00} went to Token XXXX. That left {$120.00} of unpaid interest on Token XXXX. Great Lakes reallocated the remaining {$850.00} towards the other XXXX tokens, and applied {$450.00} of it to Token XXXX, although that token had only accrued about {$220.00} in interest that month. 

I am very concerned that Great Lakes is not allocating my payment to cover all the monthly interest accrued on Token XXXX. As stated in the beginning, my monthly payment of {$870.00} is more than enough to cover the interest accrued monthly on all XXXX tokens. It is also my understanding that my monthly payment would cover the interest accrued monthly on all XXXX loans. I am confused and perplexed as to why Great Lakes would not apply my payment to cover the interest accrued for Token XXXX. I am concerned going forward, because if they are not applying my monthly payments are not going towards all the monthly interest accrued for Token XXXX, then that interest will accumulate and it will be harder to pay it down in the future. 

It is my belief that Great Lakes intentionally misapplied my payment. On XX/XX/2019, I made a second monthly payment of {$5000.00}. The second {$5000.00} payment was suppose to go straight to the principal of XXXX XXXX. 
It was my intent to pay {$870.00} as my monthly payment ; the {$870.00} would cover the monthly interest accrued for all XXXX tokens, including the {$130.00} of accrued interest on Token XXXX. Afterwards, I was going to make a second payment of {$5000.00} to that would fully go straight to the principal of Token XXXX. I was allowed to do that as long as I made my required payment of {$870.00}. 

Instead of applying my monthly payment of {$870.00} to all the interest accrued on the XXXX tokens and then applying the full {$5000.00} to the principal of Token XXXX, Great Lakes applied only {$18.00} of the {$870.00} to Token XXXX. 

It then used {$120.00} of the {$5000.00} to pay the remaining monthly accrued interest of Token XXXX, and then the remaining {$4800.00} went to the principal of Token XXXX. 

I believe Great Lakes is doing this because it is intentionally trying to delay me from paying down my principal.

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