Consumer complaint received 2017-03-14
Company: GREAT LAKES
State: FL
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with my lender or servicer
Sub-issue: Trouble with how payments are handled

Complaint:
I currently have federal student loans serviced by Great Lakes. I am enrolled in the Pay As You Earn ( " PAYE '' ) repayment plan. On XX/XX/2017, I received an email ( as required by the Federal regs. ) notifying me that my application for the PAYE repayment plan needed to be renewed. The email stated " You need to submit your application by XX/XX/2017 to renew your income-driven repayment plan. '' I gathered my information, and submitted an online application on XX/XX/2017. My wife had to co-sign, so she submitted her signature on XX/XX/2017. Because our financial circumstances had changed since our last enrollment in PAYE, I needed to submit verification of my household income and a signed paper application. I called Great Lakes on XX/XX/2017, asking where to deliver my application materials. I also asked the customer service representative about interest capitalization to make sure my interest would not be capitalized. The customer service rep., and later, her supervisor, both informed me that ( 1 ) my actual renewal deadline was XX/XX/XXXX ( not XX/XX/XXXX ), ( 2 ) the date of XX/XX/XXXX indicated in the email, reflected my real deadline of XX/XX/XXXX plus a " grace period '' after the renewal deadline, which is apparently a policy of Great Lakes, ( 3 ) internal processing time for my application was 12 business days, and ( 4 ) even though I had submitted my materials well before either deadline, if Great Lakes was still processing my application when the deadline ( XX/XX/XXXX ) passed, Great Lakes would capitalize the accrued interest on my loan. 

I have never received any correspondence from Great Lakes indicating that my actual renewal deadline was XX/XX/XXXX. 

I have a significant loan balance for XXXX level education, so this interest capitalization is of significant value. The supervisor also told me that I " could '' be a " potential candidate '' to have the capitalized interest removed if all of my information was received by XX/XX/XXXX, but that this was discretionary, and I would have to call back to request the removal after the interest was already capitalized and I was effectively un-enrolled form the PAYE program. During this time, I would not be responsible for the increased payment, but Great Lakes would capitalize XXXX dollars of interest on my loans - even though I had submitted all of the required information approximately two weeks before the deadline date given in their email ( XX/XX/XXXX ) Given the similar complaints in the recent XXXX case, how can these policies and Great Lakes ' communication practices be legal? They do not appear to even comply with the federal regulations regarding the required notice for my re-enrollment in the PAYE program. On it 's face, their email states that my application must be " SUBMITTED '' by XX/XX/XXXX. These practices are patently deceptive, predatory to consumers, and are strikingly similar to claims made by the Plaintiffs in the XXXX case. As I understand their practices, an applicant in my situation could submit a re-enrollment application after XX/XX/XXXX, but before XX/XX/XXXX ( the date stated in their email ), the accrued interest would be capitalized, and the application would not be a candidate to later have the capitalization removed. 

This practice can not be allowed to continue.

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