Consumer complaint received 2017-03-20
Product: Student loan — Federal student loan servicing
Issue: Dealing with my lender or servicer — Received bad information about my loan
Company: Nelnet, Inc. (MO)

My loan lender is Nelnet. I am on an income based repayment plan which requires I pay 15 % of my discretionary income. Nelnet advised that if I received a change in pay that I should request a re-calculation of my income based repayment amount. I was paying about $ XXXX with my re-certification due in XX/XX/XXXX. I recently adjusted my XXXX, which resulted in less take home pay per month than what the $ XXXX was based off of. Based on Nelnet 's recommendation, in XX/XX/XXXX I requested a re-calculation of my IBR and sent in a my most recent paycheck ( which had significantly less take home pay than my previous IBR amount was based on ) and a signed document demonstrating my non-paycheck income, which was negligible. Despite having a significantly lower take home pay, when I received my re-calculated amount, I owed {$140.00} more per month. When I called Nelnet, they stated that when re-certification for IBR is based on a recent paycheck, then they calculate my discretionary income based on the total gross pay, before taxes and tax exempt deductions, not on my actual take-home pay. When I asked where this was explained to borrowers, they were unable to provide me where this was ever disclosed and could not explain where a borrower could find this information. They also could not explain why it was based on my gross take home, which guarantees that I 'll be paying far more than 15 % of my discretionary income, despite assurances that I would never pay more than 15 % of my discretionary income. Now, after requesting a lower amount based on a lower take-home pay, I end up owing {$140.00} per month more than I was paying before my requested re-calculation. I read all of the forms provided by Nelnet and nowhere does it say that re-calculations based on recent paychecks would be calculated on the gross pay. Calculating discretionary income this way does not make sense, especially keeping the purpose of IBR in mind. Had I known that Nelnet would have done this, I would not have re-certified my income until I was required to for the yearly requirement in XX/XX/XXXX. I will now have to pay an additional {$880.00} over the next 6 months that I would not have otherwise paid, all because Nelnet failed to disclose how it recalculates IBR payments and discretionary income when a borrower sends in a recent paycheck as evidence of current income. Nelnet not only failed to disclose this, but has been completely unable to show me any sort of confirmation that this is how re-calculations are supposed to be done. It seems that Nelnet is actively encouraging borrowers to request recalculations based on a borrowers ' take-home paycheck being lowered, only to increase the monthly amount owed by the borrower by re-calculating the monthly amount by using the gross paycheck amount instead of the take-home amount. This is very dishonest and will cost me {$880.00} over the next 6 months, in addition to the money it will cost an untold number of other borrowers they are doing this to. Nelnet should make this information available to borrowers ( if it is even legal for Nelnet do this ).