Consumer complaint received 2023-10-05
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Don't agree with the fees charged
Company: Nelnet, Inc. (PA)

Hi- I'd like you to revisit the complaint I filed with you back in XXXX. I'd like to get my money back and I am still angry at how this was handled. The complaint information is : # : XXXX ; XXXX XXXX XXXX Federal student loan ; Dealing with my lender or servicer- Great Lakes, XX/XX/XXXX. 

Original complaint description : I am writing this letter requesting assistance with a federal Parent Plus loan I received in XXXX of XXXX, to help my daughter finance college. The loan is being serviced by Great Lakes Educational Loan Services , Inc . The loan number is XXXX ( # XXXX ). I filed a complaint with the Consumer Financial Protection Bureau. The CFPB Case Number is XXXX. 

The principal amount of the original Parent loan was {$14000.00}. The first payment was not due on this loan until XX/XX/XXXX. 

I filed for XXXX  XXXX Bankruptcy in the XXXX District of Florida in XXXX, XXXX # XXXX. The terms of the bankruptcy were to pay off all creditors at 100 % of the principal balance at the time of the bankruptcy filing with no additional accrued interest on the principal. 

Great Lakes filed a claim to be paid through my bankruptcy on XX/XX/XXXX. As of the date of the claim Great Lakes requested {$14000.00}, plus an additional accrued interest on the loan of {$3300.00} for a total of {$17000.00}. 

My XXXX  XXXX bankruptcy was discharged as paid out in full on XX/XX/XXXX, and the case was closed by the court and trustee. 

Unbeknownst to me, Great Lakes continued to accrue interest on my loan for whatever balance was due during the same years the loan was being paid off through bankruptcy. Great Lakes applied each payment it received from XXXX XXXX Bankruptcy Court to principal and interest as if the loan was not part of a XXXX  XXXX repayment plan. Great Lakes now say that I owe them {$2100.00} in outstanding accrued interest on the parent loan. 

I filed a complaint with CFBP because I believe Great Lakes are abusing the law { 11 U.S. Code 523 ( 8 ) ( A ) }. Their response to my complaint was that federal student loans can not be discharged through bankruptcy and therefore it is within their federal legal rights to continue to add interest to the principal even though the loan was in bankruptcy and they were being paid early ; and then charge me for the interest as it accrued during bankruptcy. According to Great Lakes, I need to go back to court and get another judgement to discharge the parent loan. 

My bankruptcy attorney said that federal law allows Great Lakes to do what they did because federal law states that federal student loans can not be discharged through bankruptcy court. My attorney also said it is impossible to get a discharge unless I am XXXX. Any legal action will cost significantly more than the balance I owe. 

I believe my loan should be closed out by great Lakes. They were paid in full early through bankruptcy. 

Great Lakes did not need to submit their claim to the bankruptcy court. In fact, my initial list of creditors did not include them because I knew the loan could not be discharged. When their claim appeared on my bankruptcy records I assumed that the loan was going to be treated like every other consumer debt I had. 

If what Great Lakes is doing is legal then the law needs to be clarified so that student loan servicing companies must participate based on the terms of the court ordered XXXX  XXXX bankruptcy. 

Right now Great Lakes is having it both ways and it is wrong and in my opinion abusive. I wonder how many people wind up in XXXX  XXXX bankruptcy thinking theyve paid all of their debt through the courts only to find out that student loan debt was allowed to linger through accumulated interest and the servicing companies balance bill for interest that should not have been allowed to accrue during the bankruptcy period to begin with?