Consumer complaint received 2019-10-18
Company: TRANSWORLD SYSTEMS INC
State: SC
Product: Student loan
Sub-product: Private student loan
Issue: Dealing with your lender or servicer
Sub-issue: Trouble with how payments are being handled

Complaint:
XX/XX/2019 Student Loans XXXX XXXX XXXX XXXX XXXX and University Accounting Services Unfair Lending Practices Are opaque lending practices really allowed under our Fair Lending Laws? During a phone conference, in which several participants from both University Accounting Services ( UAS ) and XXXX XXXX XXXX XXXX XXXX ( XXXX ), a UAS representative, when questioned about the lack of transparency in their lending practices, affirmatively indicated that UAS lending practices are more opaque. This letter serves as a formal request to both UAS and XXXX to retain the recording of that specific phone conversation from Monday, XX/XX/2019, as well as any and all other phone conversations involving the subject at hand. Below is the background which has brought this matter to where it is now We have a student loan with XXXX, which is serviced by UAS. The loan is currently interest only. Upon graduation, the loan will move to full repayment, principle and interest. 

Numerous attempts by email and phone have been made to understand how payments are being applied to the student loan. Ultimately having to leave a message with the President of XXXX, XXXX XXXX, was the only recourse before anyone would attempt to provide any meaningful assistance. 

Despite repeated requests, UAS can not and does not fully disclose the total monthly interest due every month. We continually receive payment notices where the payment due is {$0.00} or less than {$100.00}. Every month we pay in excess of {$500.00}, yet the principle balance never declines. Why? 

During one call, a UAS representative informed me the statements were not correct and that interest accrues daily on a variable interest rate loan. I asked again if my statement has {$00.00} balance due this month and I remit {$520.00}, why isnt the principle balance reduced when I specifically requested that the extra payment be applied to principle. The answer from UAS -- that we were past due on interest, yet no notice was provided to me by UAS as to the past due interest. The UAS representative responded that interest collects in another bucket. I asked why I was not informed of this other bucket, and why is there no transparency on their statements as to exactly what amounts are due ( both principle and interest ). How can a lender intentionally not report total interest due and not have to fully disclose any past due interest? Furthermore, UAS could not, and can not, provide a full reconciliation of our loan account. 
And in addition, when the loan moves to full repayment, all of the other bucket ( past due interest ), which has never been disclosed to me, will become part of the principle balance, and we will have to pay interest on interest. 

How, and why, is it permissible for XXXX and UAS to hide interest? This is not transparent or fair lending. How many thousands of student loan accounts are involved? Its no surprise that students can never get ahead of their loans. These practices are misleading to consumers and raise questionable ethical and fraudulent business practices. 

Its time for lenders to be held fully accountable for their student loan portfolio lending practices. If they are allowed to continue with opaque lending practices, students will never have the opportunity to get ahead of these loans or pay them off. 

By this letter, I am respectfully requesting that that both XXXX   and UAS lending practices be thoroughly investigated for compliance with all laws and regulations.

Company response to consumer: Closed with explanation