Consumer complaint received 2017-04-24
Company: GREAT LAKES
State: GA
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Struggling to repay your loan
Sub-issue: Can't get other flexible options for repaying your loan

Complaint:
I am on an IDR plan. I have tried several times to get Great Lakes who is servicing my loan to explain how they are charging me interest and explain why my balance keeps going up instead of down each month. They are charging me interest for the entire year up front on the loan. On top of that they are charging me per diem interest based on the year 's worth of interest and my " new '' principal balance.   I have now figured out that what they are doing is charging me up front for the interest. They set aside that interest amount and all of the payments I make go towards that and only that interest. Nothing I pay extra goes towards the actual per diem interest accruing.     I figured out how much interest I should be charged on the per diem rate and paid over that amount for a month to see what happened. My total balance due and total interest due still went up. Each month they are charging me interest on top of interest.     To be clear - my current principal balance is {$77000.00} which would be an estimated $  XXXX  interest for the entire year. They are charging me the interest up front so that there is no way possible for me to pay it down or off. They have been doing this since I started the IDR and it 's just compiling the interest on top of interest. I had no idea. I 've contacted them several times to figure out why my total balance just keeps going up each month. They have tacked on thousands of dollars worth of interest I had no idea was accruing. And it goes up each month instead of any amount getting put towards the actual per diem rate.     Even at the {$77000.00} balance a per diem rate would be less than {$400.00} for the month. I have a spreadsheet that I use to figure out how much interest I should be charged, but since they have put the interest up front for me to pay I would have to pay over {$5000.00} in one month to get the interest for the year paid off and then they are still charging me interest on top of that amount.   I want my loans either serviced by someone honest or refinanced so that the actual amount I owe is put in place as well as any additional amounts I pay going towards the principal balance due. This is crazy. I am working an extra job to pay down my loans and they keep tacking on interest that I will never pay off.   At the rate they are charging me interest my loans will have a balance of over {$200000.00} within the next 10 years. The original loan amount was {$63000.00}.     Great Lakes is making it impossible for me to pay off my loans or even come close to getting them paid down. I do n't have an extra {$10000.00} to pay towards interest in  one  year. They are using the IDR as a way to make sure that they get all their interest and fees up front. For the month of  XXXX  and  XXXX  I paid over the interest per diem amount on my calculated interest per loan and nothing went to principal and they added additional interest to my principal amount due. They show my balance due now at well over {$83000.00}.

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