Consumer complaint received 2016-07-15
Company: Navient Solutions, LLC.
State: AZ
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with my lender or servicer
Sub-issue: Having problems with customer service

Complaint:
XX/XX/XXXX, we applied for a tuition loan to help pay for our son 's college tuition. The loan was through XXXX XXXX and was a Federal Plus Loan. After 1 year, we decided to pay off the loan, as the interest rate was insane. XXXX XXXX, the loan was paid in full. About XXXX XXXX, we started getting phone calls about an outstanding student loan from Navient. Never having heard of the company, and knowing the student loan was paid off, we thought the calls were a scam. After a year of receiving these phone calls, I decided to confront the callers with the documents showing the loan was paid in full. A month of phone calls later, and many conversations with different entities/companies, of which I never got the same person twice, I find out that there was an additional " student loan '' that gave {$3500.00} DIRECTLY to our son, via XXXX checks from XXXX XXXX. He thought that was all the loan we qualified for, so he cashed the checks and used them for books, lab fees and living ( food, dorm charges ) expenses. No one told us he received the money, and it was not included in the pay off amount we received when we wanted the payoff amount. He graduated in XX/XX/XXXX, and then the collection calls begin, to OUR home, not his. It appears the Parent Plus loan we received also gave a chunk of money to the student to do with what he pleased -- never indicating to the parents that the student was getting cash. Once our son graduated, the loan required payments be made ; but for 8 years accrued interest, with NO ONE INFORMING US THERE WAS A LOAN OUTSTANDING. We were under the belief that we paid the loan in full. The loan began with XXXX XXXX who, XX/XX/XXXX, decided to get out of the federal loan business, and returned the loan to the Department of Ed. They, in turn, sent it off to XXXX (? ), who I still ca n't identify ... .who, in XX/XX/XXXX, sold it to Navient. All this transpired WITH NO COMMUNICATION TO EITHER OUR SON OR US, ABOUT ANY OF THESE TRANSACTIONS OR OUTSTANDING DEBIT OWED! The original paper work we completed has our current address on it and we have not moved in 26 years. Our son lived in the dorm for 2 years, then moved to a house for 6 and never received any notification of an outstanding loan. No wonder student loans are never paid off -- the students do n't even know they exist! AND, who is going to stop the vicious cycle because there is interest being accrued on the loan amount? Why would any company want the loan paid off early, and receive less money? I have since paid the loan off, and hope that other parents do not fall into the same dark hole we did, not knowing that the tuition loans the parents applied for, can give money DIRECTLY to a college student without the parents knowing, and place the students in a ridiculous amount of debt before they even earn their degree! I still can not believe no one, at anytime, from any company, tried to contact us regarding this loan! In addition, on one phone call to Navient, I wanted to make a payment to show good faith. A rather large payment. I was told, since the loan was in 'default, ' they could not take the amount I wanted to pay, but could only accept the amount that was 'back owed ' ( or the outstanding interest ) for the past year. I paid that amount, but again, the loan accrued interest based on the remaining balance owed -- which would have been about half, IF they would have accepted the amount I wanted to pay. Again, the company gains more money via interest accruing, because of the larger, outstanding balance!

Company response to consumer: Closed with explanation