Consumer complaint received 2019-02-14
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: Navient Solutions, LLC. (GA)

I was in an in-school deferment with a subsidized loan through Navient for the entirety of XXXX. I finished my program and expected that I would soon begin to be responsible for accruing interest again. 

I checked frequently, logging into my account on at least a weekly basis. For that entire time period from XX/XX/XXXX-XX/XX/XXXX, Navient reported to me that my unpaid interest. There was no change in balance, any accruing interest or a change to my deferment status. No statements or communications from Navient were received in this time. I wanted to make sure I was on top of my payments, and so I checked repeatedly. They viewed my account login information and could see that I was diligent with this. 

On XX/XX/XXXX, I received my first statement from Navient since I began the deferment. Interest began accumulating and I had an upcoming payment due. That all looked correct as expected. What was incorrect was a change in my balance. It wasn't immediately clear why, but my balance had increased by {$150.00}. No explanation was given, no charges or unpaid or past due interest was reported. I called Navient and was told that interest had capitalized and added to my balance. I asked how this was possible, as the day before Navient was still reporting the unpaid interest as {$0.00}. I was told Navient would investigate and follow up. 

Twenty-four hours later, I received three documents from Navient explaining my balance and how interest works. These did not address my complaint. I called Navient again and spoke to three employees including two supervisors ( # XXXX and XXXX ). I was told I was retroactively charged interest because the paperwork had just arrived from the school explaining I had finished my program. 

I understand wanting to charge me interest for that period. My complaint is that the interest was charged despite Navient actively reporting my unpaid interest as {$0.00} and then IMMEDIATELY capitalized with zero communication to the consumer. It is not ethical, fair or honest to capitalize interest that has not actually accrued. If Navient had at any time during that period reported to me that interest was accruing, I would have paid it. They did not do so and retroactively penalized me, increasing my balance and total amount I'll owe over the lifespan of my loan, without a single statement. I still have not received documentation that interest accrued during that period. Navient simply decided to tell me it was {$0.00} but capitalize it anyway. 

I was told on the phone this problem would be investigated to prevent {$0.00} of unpaid interest in being reported to others in the future, but nothing would be done for my account since the interest had already capitalized. They were essentially saying the process is meant to go from phase 1 ( no interest is accruing ) to phase 2 ( interest begins accruing ) to phase 3 ( interest is capitalized ), but they could only solve my problem in phase 2. That's an insult because my complaint is specifically that they went from phase 1 to phase 3 with NO communication to me as the consumer. It is an unethical practice that puts the student on the hook for slow communication between Navient and the schools. At the bare minimum, I should receive an accurate statement of accrued interest BEFORE that interest is allowed to capitalize. Navient 's failure to do so is taking advantage of students who may not notice increases in their balance.