Consumer complaint received 2018-10-09
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: Nelnet, Inc. (AL)

Nelnet, the servicer of my XXXX XXXX loans has improperly capitalized the interest of my student loans and currently show my account status in repayment. I have been in school at least at half-time status since XX/XX/XXXX. I have never fell below this status, even after graduating with one degree and immediately enrolling as half-time in another degree during the loan grace period. In the Fall of XX/XX/XXXX, I enrolled at XXXX XXXX University ( XXXX ) and XXXX XXXX XXXX XXXX College ( XXXX ) in an XXXX XXXX as an XXXX XXXX student attending at the host school campus being XXXX. From XX/XX/XXXX until XX/XX/XXXX, I have maintained half-time status between the two schools. In late Fall of XX/XX/XXXX, I received notice that my loans were in repayment and that interest had been capitalized. Because the two schools reporting independently to the XXXX XXXX XXXX, each school reported me as less than half time. I was unaware that a consortium had to be submitted showing half-time status between both schools. As the home school, XXXX provided me the signed consortium and I submitted to Nelnet in XX/XX/XXXX. The consortium detailed the previous semester as well as the Spring XX/XX/XXXX. Nelnet confirmed with me in response to my protest that my loan should be in deferment and should have never entered payback status and the original grace periods for all of my loan should be intact. They were to un-capitalize the accrued interest and report the accurate balances to the Consumer Credit Bureaus. I have submitted consortium 's with half-time enrollment for every semester from Fall XX/XX/XXXX up to Spring XX/XX/XXXX. For the current semester, I am maintaining a half-time course load at XXXX only. XXXX has updated the XXXX XXXX XXXX database with the correct half-time status as required but Nelnet has claimed that due to inaccuracies reported in the National Student Loan Data System ( NSLDS ), they can not verify enrollment. As a result they capitalized my interest again and placed my account in payback status. During a lengthy phone call to Nelnet and the eventual conversation with an account manager on XX/XX/XXXX, I discovered that Nelnet has never placed my account back in true in-school deferment and has never un-capitalized the interest from the XX/XX/XXXX incident. The account manger ( XXXX ) confirmed that they indeed have all the submitted consortium 's but can not answer as to why the proper account status hasn't been restored. She stated that she is requesting an internal review and will mail me a detailed account history. Meanwhile, the {$25000.00} added to the balance from XX/XX/XXXX and the accrued interest from this inflated base is reporting every month on my credit reports. I was recently denied a mortgage because the new rules request that mortgage lenders must calculate deferred loan balances at 1 % to determine a monthly payment. This equates to a $ XXXX monthly increase to my debt-to-income ratio. Nelnet has again capitalized the interest as of XX/XX/XXXX causing me further credit damage if not corrected by the end of this month. I feel as though Nelnet in unlawfully engaged in the generation of income and has breached their service contract with the federal government of which I am an intended third party beneficiary. Because of the conflict of interest in delaying my proper account status they are slow to respond.