Consumer complaint received 2017-04-19
Company: Navient Solutions, LLC.
State: MD
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:
In my fi rst three year s of repayment I was on an income based repayment plan. Because my income was low, I had a very low payment, then no payment due at all. For this reason, the interest on my subsidized loans should have been paid by the Federal Government. There is no information on Navient 's website about how the subsidized interest is paid. Despite not having a payment due, I continued to make payments on my student loans. Because I had no payment due, the option for me to choose how my payments were allocated was not available on the website. During this time I paid thousands of dollars of interest, including the interest which should have been subsidized. I called and asked repeatedly to make sure that I was not paying subsidized interest because the numbers did not seem to add up to me ; month to month there was a large variation in the amount of interest I was paying. I was repeatedly assured I was not paying subsidized interest. At the end of  XXXX  I called again to make a payment ( this was the only way I could choose the allocation of the payment ) and asked again to make sure none of my payment was going towards subsidized interest, the customer service rep explained to me that the Government pays subsidized interest on a quarterly basis. If I had made payments in between quarters, subsidized interest would have accrued and my payments would have been applied towards the subsidized interest as well. She sounded surprised this happened and apologized. I asked her to correct the mistake and she said she could not. I spoke to a manager and he also said the mistake could not be corrected. I contacted a complaint office with the Dept of Ed to make a complaint, they took my complaint but the work of that office was shifted to another office and my complaint was never brought from the  Dept of Ed to Navient. I made a new complaint with the new Dept of Ed Office fo r Complaints in  XXXX   XXXX . Several weeks later I was contacted by  XXXX   XXXX  at Navient and was told they were looking into my complaint. I 've contacted  XXXX  twice for updates via email and every time I get the same automated message that she is reviewing my concerns and will contact me when she has more information.     Further, in  XXXX , just after Navient took over from  XXXX   XXXX , Navient capitalized approximately {$20000.00} of interest because they said I did not submit my income recertification on tim e ( th ey accepted it 2 days late ). I was late in submitting the recertification because I had moved abroad for a job and was having a difficult time procuring the correct information to give Navient, they seemed really unsure about how to handle my situation because I was not required to pa y US in come taxes at that time. At the time I was not warned that the interest would be capitalized, I was only told that the amount of my payment would go up. I 've long been frustrated with the income recertification process. It should only happen after taxes are due (  XXXX   XXXX  for residents abroad ) and they should not be able to penalize you by capitalizing on interest, particularly if you do n't end up switching repayment plans, as I did not, I remained in the IBR plan with a  XXXX  due monthly payment.

Company response to consumer: Closed with explanation