Consumer complaint received 2016-03-14
Company: Navient Solutions, LLC.
State: VA
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:
Upon XXXX from XXXX school in XX/XX/XXXX, I consolidated by student loans into a single " Smart Loan Account '' with SallieMae. SallieMae issued a book of payment coupons that were to be submitted with each monthly payment. At no time did the coupons book contain any written notice or other information informing me how any over payments were to be processed or used by SallieMae, as is required by 34 C.F.R. 682.209 ( b ). At no time did SallieMae provide any written notice of the manner in which excess payments were to be treated by SallieMae, nor did any correspondence from Sallie Mae contain any portion of the language required by 34 C.F.R. 682.209 ( b ). 

In XXXX XXXX, I refinanced the mortgage on my house, and used some of the equity in the house to pay off the remaining balance of my consolidated student loan. An agent from the mortgage company contacted SallieMae, requested a pay-off amount, and was informed that the pay-off amount for the student loan was {$20000.00}. I subsequently called SallieMae Customer Service directly to confirm the pay-off amount, and was informed by the customer service representative that the pay-off amount was, in fact, {$20000.00}. 

We closed on the refinance on XXXX XXXX, XXXX, and the full {$20000.00} payment was received by SallieMae on XXXX XXXX, XXXX. The payment was not posted into SallieMae 's payment system, however, until XXXX XXXX, XXXX. By that time a delinquency notice was sent to me on XXXX XXXX, XXXX. 

On XXXX XXXX, XXXX, I called to complain about the delinquency notice. In that conversation, the SallieMae customer service representative confirmed that the payment was actually received on XXXX XXXX, but that, pursuant to its policy, SallieMae held all large payments for two weeks to ensure that the payment had sufficient funds. The Borrower Correspondence History report from that conversation notes that I complained about SallieMae 's policy of holding the money without crediting the account, and further confirms that I specifically informed the Customer Service Representative that the amount paid was intended as a " pay-off '' of my consolidated student loan. Pursuant to 34 C.F.R. 682.209 ( b ) ( 2 ) ( ii ), SallieMae must follow my direction and must treat the payment as a pay-off of the principle ; it can not treat the payment as an advance payment to the next payments due. At the conclusion of the call, the Customer Service Representative told me that the late fee would be removed from my account and that there was no longer any outstanding amounts owed on my account. 
Six years later, on XXXX XXXX, XXXX, I received a Notice of Claim from XXXX, who is now holding the loan, informing me that I was delinquent and being charged additional penalties. I repeatedly called both SallieMae and XXXX to obtain the entire file on my account, and after receiving the run-around for several months, I received a file that included SallieMae 's Borrower Correspondence History. The documents confirm all of the above facts, including my XXXX XXXX statement to SallieMae that my recent payment was to be treated as a " pay-off '' of the student loan. The document also show that, at the time that SallieMae initially received the {$20000.00} payment for my account, the actual balance owed on the consolidated loan was {$20000.00}. Accordingly, I actually overpaid in the amount of {$240.00}. 

Despite the fact that I complied in every way with my loan obligations and the Federal Regulations, I am now receiving notices that my XXXX paycheck will be garnished by XXXX for outstanding amounts on my student loan, plus thousands of dollars of penalties. My credit report also is showing that I am delinquent on my student loans, thus, hurting my credit.

Company response to consumer: Closed with explanation