Consumer complaint received 2024-03-18
Product: Student loan — Private student loan
Issue: Dealing with your lender or servicer — Co-signer
Company: TRANSWORLD SYSTEMS INC (NC)

I am writing to you today as the co-signer of a private student loan for my daughter because we are beyond frustrated in the whole student loan system, be it private or federal, but this pertains only to her PRIVATE student loan that was originally taken out through XXXX XXXX XXXX XXXX in XXXX. 
I will start with some background in hopes that you might understand a little of our mindset. She grew up a XXXX child, the oldest of three, and was an honor roll student in high school. We were a young family that had to endure many military moves to different states as she was growing up, yet she still excelled in school, considering switching schools and friends numerous times. When she was accepted to variety of universities and colleges, we were very excited, but nervous at the same time, as neither myself nor her father had attended college, or did any of our siblings ( XXXX for me, and XXXX for her father ). I researched as much as I could, and attended the financial assistance classes with her to learn anything about the process that would help us get through it so that she would be able to attend the college of her choice. She decided on a private college and was given a little financial aid because at the time her father was unemployed, so that was wonderful. 
When we realized that the financial aid that the school offered would not be enough, and she did not qualify for enough in federal loans to cover all the expenses, she had to take out a private student loan, with a co-signer, because at XXXX old, she did not have any credit. 
Her father had been retired from the military a few years now, so we decided to apply for a student loan with XXXX XXXX XXXX XXXX because it was on the base nearby and had a great reputation with military members. The rate was a variable rate, and was at 6 %, and I chose to co-sign for her. This type of loan also allowed us to request funds each semester. The loan from this credit union also had a co-signer release clause, that could be granted if certain conditions were met, such as 48 continuous on time payments and the financial ability to pay the loan. 
The first disbursement was paid to the college in XXXX of XXXX and the last disbursement was paid in XXXX of XXXX. We immediately started sending monthly payments in XX/XX/XXXX to try and start the payoff process. My daughter left college, without completing, in XXXX due to personal difficulties and we began making weekly payments to reach the new payment due amount. 
In XXXX, XXXX XXXX XXXX XXXX was purchased by XXXX XXXX XXXX, and the loan just continued with them, we were never given the option to shop around if we wanted to. In XXXX, XXXX XXXX XXXX was quickly taken over by XXXX XXXX XXXX, and again we were not given a choice to transfer the loan elsewhere. The loan is still with PenFed, through UAS Echo, which changed to XXXX XXXX, through Transworld Systems Inc. ( TSI ).

To get to what brought us to this frustration. From the initial disbursement in XXXX until XXXX of XXXX, the interest rate stayed at 6 % - almost 13 years. Then in XXXX of XXXX, it went to 7 %, in XXXX of XXXX, it went to 7.75 %, in XX/XX/XXXX, it then jumped to 8.25 % and as of XX/XX/XXXX, the interest is now at 8.5 %. Up until XXXX of XXXX, we never really noticed because we have always sent in more than the amount due, but our XX/XX/XXXX payment was {$4.00} short because we missed the notice that the interest was going up AGAIN. It did not go up in 13 years, then in less than one year jumped from 6 % to 8.5 %, we did not expect that, so we were not looking for that change of billing situation to occur so quickly. Between the holidays and family health issues, this was the last thing on my daughter and I had on our minds. In XXXX, we asked to be considered for a co-signer release, but because we were {$4.00} short in our XXXX payment, XXXX, ( or TSI, or XXXX ), would not even consider it. They did agree to allow us to apply after 9 consecutive on time payments going forward instead of waiting the usual 48 months because they could not show that they have sent me, the co-signer, any correspondence at any time during the life of the loan, especially when the interest rate was jumping so quickly. Is this legal for the rate to change this much, so often? Especially after 13 years of no change? 
The original amount of the total loan disbursed was {$53000.00}, the current balance is {$37000.00} and the unpaid principle is {$37000.00}. We have paid a total of {$52000.00} thus far, so I feel we should not be penalized for a {$4.00} error, when this company has had so many errors through the life of this loan, such as the different company names, without us having a choice to negotiate terms, never sending co-signer any correspondence, and the shear difficulty getting any information ( nothing showing co-signer release on webpage ). What will be their next excuse when we try to release the co-signer? Obviously, she is financially able since already has paid {$52.00}, XXXX to them. 
We may have been young and foolish when we took on this private student loan and shame on us, but we are older now and feel that others should be taught how awful this and other companies are, and how they take advantage of people, especially first-time college student families who only want the best for their children. It is just not right that we are stuck with this horrible company until the loan matures in XXXX. It is not fair that this company can jump up the interest rate so much in one year to ESTABLISHED clients, I can only image what it will be by the time it matures. Sure, she can refinance the loan, but this is not the time to do that and it shouldnt be her only option. It is not fair that it is so frustrating to get any answers because the only thing you hear about from the President of the United States is about forgiving federal loans but what about all the rest of the people getting screwed by private student loans? Where do we turn to for help? Is there even help? How can we get information out there to help other families to avoid private student loans? How can we stop the interest rate from raising? There should be a cap! Thank You