Consumer complaint received 2020-04-16
Company: Nelnet, Inc.
State: AZ
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:
On XXXX XX/XX/2020, in light of the recent CARES Act and the impact that it has on student loans, I checked my personal accounts and noticed an automatic withdrawal that occurred on XXXX XX/XX/XXXX. I contacted Great Lakes, the servicing company, since the Act went into effect on XXXX XX/XX/XXXX. They agreed that I did not have to make that payment and will refund the money. I then asked for verification that I would receive credit towards the Public Service Loan Forgiveness Program during the duration of the payment suspension. I was read a canned answer which indicated that it would count. Everything was great up until this point. 

I had my account pulled up online while I was speaking with the representative on the phone. My account states [ y ] our loans are in forbearance. I asked if that was the proper categorization of my status since this was done automatically ( without my request ) and to ensure there would be no adverse effects on my account. I was told it was technically an administrative forbearance and everything would resume under income based repayment after the expiration of the CARES Act on XXXX XX/XX/XXXX. I then noticed that my account stated that my payments would resume in XX/XX/2020. So I asked what happens in XXXX and why I couldnt resume payments in XXXX. I expressed my concern that interest would be applied after XXXX XX/XX/XXXX, no payment would be collected during XXXX, and asked what effect this would have on eligible payments applied to the Public Service Loan Forgiveness Program. The representative put me on hold and came back several minutes later. She stated that unfortunately XXXX would not count as it takes their systems several weeks to take my loans out of the forbearance status and put them back into repayment status. So I was told that I could leave everything as is and resume payments in XX/XX/2020, or essentially forego the benefits of the CARES Act and continue to make payments as scheduled, although not required, throughout the next several months so the status would not change and I would not lose credit for XXXX. I asked why my payments couldnt just logically resume in XXXX and I was told it was not possible. 

I get it, it is only one month. But, the impact of this in the aggregate provides great benefit and financial gain to the company in the long run. They have just added an additional month to all of their customers loan repayment terms. The Public Service Loan Forgiveness Program has now become 10 years and 1 month for anyone who has a loan assigned to Great Lakes. 

I reached out to a friend of mine who has a different loan servicing company. His payments will resume in XXXX with no issue. It seems to be specifically attributed to Great Lakes. 

This is only compounded by a very similar issue that I have had with Great Lakes, every single year. As a participant in the income based repayment plan, I am required to re-certify my income annually. Every year, I comply with the requirements and my payments are recalculated, however, the same issue occurs and a repayment month is skipped and not counted towards the Public Service Loan Forgiveness Program or anything else. I have asked to be allowed to make a payment during this skipped month and every year I am told it is not possible and that any payment would not count as a regular payment and would only be applied to the principle. 

It all comes down to their systems, policies, and plan to drag everything out at the expense of the consumer. The 10 years that it should take to make the required amount of qualifying payments towards the Public Service Loan Forgiveness Program will now be extended an additional 10 months, plus the one month to recover from the CARES Act implementation of forbearance, for a total of 10 years and 11 months. This only benefits Great Lakes as interest accumulates, peoples incomes rise, and the term extends. I know I am only one person, however, the impact across all loans held by Great Lakes is huge.

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