Consumer complaint received 2017-10-02
Company: Nelnet, Inc.
State: MI
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:
In XXXX, some of my federal student loans were serviced by Nelnet , Inc. ( account # xxxxxxxxx ), and some of them were serviced by XXXX XXXX XXXX XXXX XXXX ( account # xxxxxxxx ). I used forbearance time when I needed to, but not always with both servicers at the same time. Thus, I had significantly more forbearance time remaining on my Nelnet serviced loans than I had on my XXXX XXXX serviced loans.. 

In XX/XX/XXXX, Nelnet acquired the loans previously serviced by XXXX XXXX. On XX/XX/XXXX, I called Nelnet to find out how this would affect me. I was told that all of my loan terms would remain the same. The only change was that my payments would now all go to Nelnet. I was given the amount of forbearance time left on the loans originally held by Nelnet ( called xxxxxx in their system ) as compared to the lower amount of forbearance time left on the newly acquired loans ( called xxxxxx in their system ).. 

In XX/XX/XXXX, I used up the last of the forbearance time on the acquired loans : xxxx. I still had 25 months of forbearance time left on the original loans : xxxxx. Thus, for my XX/XX/XXXXbill, the acquired loans were no longer in forbearance, and forbearance time was only applied to the original loans : xxxxx. This was expected, as I have always made sure to ask the Nelnet representatives to tell me the remaining forbearance time available for all of my loans, every time I have used forbearance. Not once in the last 2 years has a representative told me that the disparity between forbearance time left on my loans might become an issue.. 

In XX/XX/XXXX, the forbearance on original loans xxxxx was removed, my bill backdated, and the amount past due skyrocketed upwards. Apparently Nelnet has a policy in place to block the usage of remaining forbearance time on originally held loans if the forbearance time on acquired loans has been used up. Many phone calls all end up with the same answer, it is policy.. 

On xxxxxxxI filed a complaint with the ombudsman : case # xxxxxxxx.. 

On XX/XX/XXXX, Nelnet respond by contacting me to explain their policy. I told them that I needed a solution. I told them that I needed to know what I needed to do in order to use my remaining forbearance time. Nelnets representative, xxxxxx, was able to tell me that the available forbearance time on xxxxx is still xx months, but the only way to access it is to pay off the acquired loans xxxxxx in full over $ xxk.. 

I called the ombudsman back that same day and my case was escalated. I was told to wait 7-10 business days for further contact from Nelnet..
At the end of the 10th business day xxxxxxx I called the ombudsman back to report that Nelnet had failed to provide any further response. The ombudsman representative said that she had heard of this forbearance problem before, the ombudsman office had researched it on a previous complaint, and that they been hit by the same it is policy wall. The ombudsman office recommended that I file a complaint here.. 

I have contacted the Michigan Attorney Generals office, but they said that they also refer all student loan issue here.. 

To add salt to the wound, despite my income based repayment plan recertification approval on XX/XX/XXXX, Nelnet has delayed the application of the recertification by 2 months. In XX/XX/XXXX, I called to ask about this. I was told that the recertification could only be applied after I had paid the overly inflated past due balance in full. I pointed out the incongruity of this statement with the fact that Nelnet HAD applied the recertification to my XX/XX/XXXX bill. I could not get a reasonable answer as to why the recertification could not simply be applied to my past due XX/XX/XXXX bill, as my recertification was approved before my XX/XX/XXXX bill was delinquent, or even my then upcoming XX/XX/XXXX bill.. 

The only option left, that I qualify for, is to consolidate everything into a new loan. Nelnet is trying to force me into this option early, thereby waiving, losing, and simply throwing away my remaining xx months of forbearance on groups xxxxxx I should not have to do this now. I should be able to finish using my remaining xx months of forbearance on groups xxxxx FIRST. Furthermore, why would I trust them to honor the new forbearance on a newly consolidated loan if they can outright rob me of my existing forbearance rights with financial trickery?. 

This is wrong.. 

Had my XXXX XXXX serviced loans never been acquired by Nelnet, I would not be blocked from using my remaining xx months of forbearance on groups xxxxx. This significant detail is proof of the adverse effect that their actions, and their actions alone, have produced. Student loan servicers are not supposed to be able to harm federal student loan borrowers through acquisitions and financial trickery. Not only does Nelnet do it, they apparently do it often enough to have a policy. A POLICY.  Merely instating a policy does not make it legal or not harmful. Please tell this to Nelnet. If the policy is simply being misapplied, someone needs to fix the process. If this policy is real, please get them to stop this harmful policy. Please help.

Company response to consumer: Closed with explanation