Consumer complaint received 2022-07-01
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: Nelnet, Inc. (NY)

I am writing to file a second Complaint with the Consumer Financial Protection Bureau ( CFPB ) against Nelnet because it is clear Nelnet did not fully review the Complaint and Request for a Refund that I filed with the CFPB on XX/XX/XXXX ( Complaint Number XXXX ). Instead, on XX/XX/XXXX, Nelnet provided a wholly deficient response to my CFPB complaint that relied on an incorrect reading of Nelnets auto-debit agreement to falsely claim I was not eligible for a refund after Nelnet improperly processed an auto-debit payment of {$120.00} on XX/XX/XXXX, while my Nelnet account ( No XXXX [ REDACTED ] ) was in a brief forbearance pending consolidation to XXXX XXXX to benefit from complete loan forgiveness under the Public Service Loan Forgiveness ( PSLF ) program. Nelnets failure to adequately address the Complaint and process a simple refund of {$120.00} is unacceptable. Moreover, the fact that Nelnet is going to extreme lengths to not only harm borrowers and deprive them of their rights under both the forbearance and PSLF programs but also to provide the CFPB with false and incorrect information in its response to complaints should be of grave concern to the CFPB. 

Specifically, Nelnets response to my CFPB complaint stating that it can not honor your request for a refund because requesting a forbearance constitutes a change or cancellation of auto debit and that [ b ] ased on the terms you agreed to under the auto debit program, we must receive a request to change or cancel an auto debit payment up to three days prior to the scheduled payment is simply wrong for the following reasons : ( 1 ) I DID NOT initiate a change or cancellation of my auto-debit ; rather, I initiated a forbearance, which is a separate and distinct process available to borrowers ; ( 2 ) Prior to placing my account in forbearance, several Nelnet representatives advised me that the ONLY way to stop the XX/XX/XXXX, payment from occurring was to place my account in forbearance because it was too late to initiate a change or cancellation of auto-debit ; Nelnets advice comports with the plain language of Nelnets auto-debit agreement and FAQs available on its website; ( 3 ) Nelnet, through its internal controls , was obligated to stop the auto-debit from occurring during forbearance, which it failed to do ; ( 4 ) Nelnets response to the CFPB contradicts the plain language of Nelnets auto-debit agreement, FAQs on their website, and numerous oral statements made to me BEFORE AND AFTER the auto-debit occurred on XX/XX/XXXX, none of which state that a forbearance request is required to be initiated three days in advance and, in fact, clearly state that auto-debit will not occur during forbearance or deferments ; ( 5 ) I did not sign an auto-debit agreement with Nelnet because, when my loans were transferred from another servicer in XXXX, the auto-debit also transferred without any action on my part ; and ( 6 ) Although Nelnet initially provided the same baseless excuse to me as it did to the CFPB for denying processing the refund ( on XX/XX/XXXX, in response to the first request for a refund that I initiated on XX/XX/XXXX ), subsequent communications with Nelnet have acknowledged that I am entitled to a refund, including by XXXX supervisors following triple-escalation of my calls, one of which occurred after I filed the CFPB Complaint on XX/XX/XXXX, and before Nelnet responded to the CFPB Complaint on XX/XX/XXXX. 

See Exhibits A ( Chronology ) and B ( Nelnets Auto-Debit and Forbearance Information ). 

Accordingly, I hereby ( 1 ) file a second Complaint against Nelnet for improperly processing an auto-debit payment of {$120.00} on XX/XX/XXXX, while my Nelnet account XXXX No. [ REDACTED ] ) was in a brief forbearance pending consolidation to XXXX XXXX and ( 2 ) document my Request for a refund of {$120.00} to resolve the Complaint, which has been outstanding since XX/XX/XXXX, and can be accomplished consistent with the instructions provided by XXXX XXXX to Nelnet during a three-way phone call on XX/XX/XXXX. Specifically : Nelnet failed to stop the XX/XX/XXXX, payment of {$120.00} from debiting from my bank account after I placed my Nelnet account containing one FFEL loan in a brief forbearance due to a pending Direct Loan Consolidation to XXXX XXXX. The consolidation is required to benefit from PSLF under the Limited Waiver. Because I expect to receive full forgiveness under PSLF I am well above the 120 qualifying payments required it made no sense for me to pay the XX/XX/XXXX, payment when it could be paid off by instead first by the pending consolidation and then forgiveness under PSLF. As detailed in the attached Chronology, Nelnets failure to stop the auto-debit was done in contravention of numerous statements Nelnet made to me both orally and in the plain language written on their website regarding forbearance and auto-debit which make clear that forbearance stops auto-debits from occurring.

Nelnet continues to promise and only to then later refuse to issue me a refund of {$120.00} for the XX/XX/XXXX, payment that was improperly debited from my bank account during forbearance. As detailed in the attached Chronology, I have made diligent, repeated requests to Nelnet, beginning on XX/XX/XXXX, to process a refund. Despite multiple assurances that Nelnet would process the refund request, repeated assurances that a refund could be issued to me even after the new consolidation loan paid off the loan serviced by Nelnet, and supervisor authorization ( including following a triple escalation on XX/XX/XXXX ) and assurances of the above points, Nelnet has intentionally delayed processing the requests and given various excuses for denying issuance of the refund to me. Although Nelnet has more recently said that it can not process the refund despite Nelnets errors because the loan has been paid off, the truth is that servicer-to-servicer adjustments can be made months or even years after a loan has closed, a fact confirmed by multiple Nelnet representatives as well as XXXX XXXX. 
Nelnet has engaged in predatory bait-and-switch practices that are deceptive and contrary to my best interest as a borrower. Nelnet has repeatedly used tactics that are harassing, dishonest, unethical, and seem intentionally designed to delay and frustrate me as the borrower into giving up so that Nelnet does not have to process a refund despite it having zero impact on their bottom line other than wasting their employees time in an amount that far exceeds the amount of the refund at issue or ensuring that the underlying loan is paid. It has been extremely time-consuming, exhausting, and absolutely maddening for me attempt to resolve this simple matter. Moreover, Nelnet deliberately making this process painful is contrary to the intent of a forbearance, which is not to create a new issue for a borrower. The attached Chronology provides a detailed account of Nelnets unscrupulous tactics. See Exhibit A. 

A detailed summary of my Complaint and attempts to resolve this matter with Nelnet and XXXX XXXX is contained in the attached Chronology ( updated as of XX/XX/XXXX ). See Exhibit A. In addition, I am including Nelnets Auto-Debit and Forbearance Information, Forbearance Approval Letter dated XX/XX/XXXX, and Nelnet Payment History as of XX/XX/XXXX. See Exhibits B, C, and D, respectively.