Consumer complaint received 2015-07-21
Company: DISCOVER BANK
State: NC
Product: Student loan
Sub-product: Non-federal student loan
Issue: Dealing with my lender or servicer
Sub-issue: Trouble with how payments are handled

Complaint:
Private Loan : Discover Student LoansSchools : XXXX XXXX in WI, XXXX in XXXX believe that Discover Student Loan uses student loan unethical tactics to create high interest loans to co-signers. Discover 's underhanded tactics result in high interest, large loans, to cosigners looking to help the student. They base the loan on the student 's credit rating and financial status, and then when it 's time to pay the loan back, co-signers become co-borrowers and are harassed even when the loan is not in default. 
My daughter has approximately {$100000.00} in student loans with Discover Student Loans. She borrowed this money, with my husband and myself, as " co-signers '' to get her XXXX in XXXX XXXX. Throughout the years of acquiring these loans, we were constantly surprised that our interest rates were so high, although we had credit scores above XXXX. Discover would give us an interest rate range of approximately 6.0 to 9.0, and then give us an interest rate of 8.99. When we asked why this interest rate was so high we were told that it was based on our daughter 's credit rating because we are just co-signers. However, when it came time to pay back the loan Discover Student Loans would harass us because we are " co-borrowers ''. So, Discover gets to assign a high interest rate based on the student, but then switches the mentality of the loan when it comes to paying it back. My daughter worked part-time during school and tried to get Discover to provide a loan without a co-signer, but they refused. 
After she graduated, my daughter was shocked to learn that her monthly payments would be {$1000.00}. She worked with Discover for months in an attempt to get her loan to an affordable amount, which would then increase as her work situation improved over time. We thought that Discover would take her salary into consideration but they would not because they confined the loan to a 10-year term. We finally got Discover to reduce the payments to $ XXXX/month, which is still a significant burden for my daughter who makes approximately $ XXXX/year. However, since her parents are tied to the loan, she would often times go without grocery, heating and air conditioning and get behind on her rent, ( risking eviction ) to pay Discover. My daughter was getting harassed and we were getting harassed, even when the loan was not in default. And because Discover 's first question to my daughter during these calls was " can your co-signers pay '', it became apparent that the entire scheme ... 
1. Mandating co-signers. 
2. Using student credit rating instead of co-signer 's credit ratings to put the interest rate at the higher end of the range. 
3. Holding the loan to a 10-year term. 
4. Not allowing for income considerations. 
5. Harassing students and co-signers, even when the loan is not in default. 
..is orchestrated to use students who are trying to better themselves to facilitate high-interest loans and go after what Discover might consider to be " deeper pockets '' of the co-signers. 
We became the victims of an unorganized and ruthless partnership between XXXX XXXX and a Discover Student Loan 's antiquated financial payment system that left us seeking counsel. Well, most recently my daughter was told that her student loan monthly payment is increasing to $ XXXX/month. When she asked why she was told that XXXX XXXX management of her loan was temporary. 
Well, if Discover Student Loan 's goal is to create homeless individuals out of students who are trying to become professional contributors to the economic state of the U.S.A., then well done indeed. 
There are so many people who just refuse to pay back these loans. My daughter is not one of these people. She just wants to be successful in life and right now Discover is preventing her from doing that.

Company response to consumer: Closed with explanation