Consumer complaint received 2018-10-16
Company: Nelnet, Inc.
State: TX
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 had submitted a complaint to the CFPB about the abusive and predatory tactics that Nelnet is using to defraud student borrowers. The original complaint is copied below. Initially Nelnet responded by claiming that they were going to reinstate the borrower benefit ( a 1 % interest rate reduction on the loan ) but they immediately used another shady and abusive trick to remove the incentive again just days after telling me and the CFPB that they would put it back on the account. The truth is that Nelnet bought a portfolio of loans with these types of incentives on them and they know that through deceit and fraud they can squeeze student borrowers for millions.

FACTS The company lied to both myself and the CFPB claiming that they would reinstate the incentive. In reality they " reinstated it '' and then immediately removed the " reinstatement '' because while my original CFPB complaint was pending and again without any notice to myself or the CFPB they " reconstituted '' the loan. In doing so they changed the monthly payment without telling me from {$260.00} where it had been for 15 years to {$280.00} ( even though at the time I was told the payment was $ 300+ ). I continued to make all payments on time of {$260.00} but since it was short by {$20.00} this was their excuse to once again remove my incentive. My address, which had been correct in their system mysteriously changed and apparently notice was sent to another address. Since then I have requested information about the reconstitution of the loan and the master promissory note numerous times and they have not sent me a single page of documentation about it. 

I called the company multiple times and at no point did they mention that the loan had been reconstituted until of course the payment was late. Moreover, they had been accepting payments of {$260.00} all along with no issues but apparently the " reconstituted '' loan didn't kick in until this month. Once again I asked them to reconsider this absurd decision that they have made and they told me to get lost. 

ORIGINAL COMPLAINT Dear Sir or Madam : I graduated from school in XX/XX/XXXX and shortly thereafter I consolidated my loans and began paying them. For the last 14 years I have never missed a payment and I have never been late. Since I have lived overseas several times over the last 14 years the address on file for my loan information has been my fathers house. The only communication I received from my loan company was a XXXX once a year. On XX/XX/XXXX I received three emails from my sister who takes care of my father in Connecticut. Each email had an attachment. The first attachment was a letter dated XX/XX/XXXX from my loan servicer XXXX  with a notice stating that my payment on XX/XX/XXXX was being returned because there was a new servicer. The second attachment was a letter dated XX/XX/XXXX from a company called Nelnet stating that a " borrower benefit has been removed from your account ''. There was no mention of what the benefit was, or why it was removed. The third attachment was a letter dated XX/XX/XXXX from Nelnet demanding that I pay double my normal student loan amount. The following day I called Nelnet to inquire about the mysterious borrower benefit that was being removed and I was told that the " benefit '' removed resulted in a 1 % increase in my interest rate that was equal to more than {$10000.00} over the life of the loan. The reason that it was removed was because my payment was late. When I told them that I had sent all my payments and I have records showing that the XX/XX/XXXX payment was made on time they said that it did not matter. It was my fault because I should have known that the servicer had changed. I told them that I never received any notice of the change and they said that it was still my fault. When I asked what can be done to resolve this they said that they would take it under advisement but there were no guarantees that anything would be done. I immediately made the missed payment over the phone. Predictably, today I was notified that the " benefit '' would not be reinstated and that I was being penalized {$10000.00} because of the missed payment. I believe that this was a calculated move by Nelnet to increase my interest rate in an attempt to force higher payments. I hope that you will help resolve this so other students are not victimized in the same way. Thank you for your assistance in this matter. Yours truly, XXXX XXXX

Company response to consumer: Closed with explanation