Consumer complaint received 2016-09-14
Product: Student loan — Federal student loan servicing
Issue: Dealing with my lender or servicer — Trouble with how payments are handled
Company: Nelnet, Inc. (SC)

I received notice from XXXX that my account was showing a balance of {$0.00} due. I called XXXX and was informed that they could no longer service federal student loans and that my account was being transferred to Nelnet. I contacted Nelnet, was told my first payment would be due XXXX XXXX, and I notified them of my new banking arrangements. I asked specifically if there were any financial benefit to my having a direct debit arrangement ( a discount or credit ) and since there was none, that I would like paper statements and would be setting up autopay through XXXX XXXX XXXX or paying online or by check. I made a personal note to address the payment of Nelnet well before XX/XX/XXXX. 
I had made arrangements with the IRS to make monthly payments through XXXX XXXX. As I was moving to XXXX XXXX XXXX, all other direct debits ( including Nelnet ) were notified of the new bank information. 
On the morning of Tuesday, XXXX XXXX, 2016, the XXXX XXXX online system showed the IRS payment was " pending ; '' it was the only payment pending and my bank balance was {$420.00}. I expected the IRS payment to go from " pending '' to " paid. '' As soon as it did, I was going to close the XXXX XXXX account, as the IRS was the only account remaining to draw from XXXX XXXX. 

On the afternoon of Tuesday, XXXX XXXX, 2016, the XXXX XXXX online system showed the IRS payment " pending '' as well as a {$190.00} Nelnet payment " pending '' and a projected balance of - {$160.00} in the account. I immediately called Nelnet to get the payment withdrawn. They would not do it. They offered to issue a refund but the request for the refund would be held for 20 days ( " company policy '' ) " in case ( I ) decide to stop payment at the bank. '' That gave me the idea of stopping the payment, myself, at the bank. Nelnet said that if I did stop payment at the bank, I would need to make a payment to them " now '' over the phone or I would be reported as failing to make my payment ; I was frantic, so I made a payment to Nelnet over the phone. I then called XXXX XXXX and asked to stop/refuse payment on the Nelnet request. They would not stop or refuse the payment because both the IRS and the Nelnet payments were " pending '' and could not be stopped : My concern was the IRS payment ; I was assured by the branch manager via the customer service person that the IRS payment " would be paid. '' On Wednesday, XXXX XXXX, a XXXX XXXX payment of {$170.00} appeared as " pending '' due to another company failing to update direct debit arrangements ; the IRS and Nelnet payments were no longer in a " pending '' status but were listed as paid. The available balance ( which includes 'pending ' debits ) showed as - {$340.00}. 
I contacted Nelnet and after reminding them that my first payment to them was not supposed to have been made until XXXX XXXX ( as stated by them ), that I wanted a refund ... which was the only way I saw to afford a direct payment to the IRS. They said ( as they said before ) any request for a refund would be held for 20 days ( " company policy '' ) and that it would take an additional 20 days to process the refund ; so, I will not be seeing a refund of the two {$190.00} payments ( or {$380.00} ) for another 40 days ... XXXX XXXX. 
I am filing a complaint against Nelnet for ( 1 ) drafting a payment from the wrong bank ( I had already notified them of my change in banks ) ; ( 2 ) drafting the payment a month early ; ( 3 ) not being willing to withdraw the erroneous payment ; ( 4 ) insisting that I make an additional payment by threatening to report a payment failure ; and ( 5 ) taking 40 days to issue a refund.