Consumer complaint received 2024-05-24
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: Nelnet, Inc. (CA)

Nelnet will not honor SAVE subsidy for a 6 month period that I had paid in advance. Prior to the Pandemic forbearance, I had paid in excess of my monthly payment in order to make sure I was paying the interest because I was hemorrhaging interest otherwise. So I had been paying off my monthly interest prior to the pandemic. When Nelnet sent out statements prior to XX/XX/XXXX, Nelnet informed me that I did not have a payment due until XX/XX/XXXX because I had paid ahead. Accordingly, I did not submit any payments between XX/XX/XXXXXXXX XXXX XXXX XXXX XXXX  because my monthly balance was {$0.00}. During that time, I have accumulated over {$6500.00} in interest. Nelnet has given me the runaround saying that I received an approx. {$300.00} subsidy from the government during this time period as that is the amount of interest the government would have subsidized with a {$1000.00} payment. However, they are telling me that because I did not submit payments ( even though my monthly payment was {$0.00} because I had ALREADY PAID IT ), I still was accumulating that remaining interest balance every month in the amount of approximately {$1000.00}. This makes no sense for the following reasons : ( 1 ) Why should paying ahead have any bearing on the subsidy ; ( 2 ) I would not even have known that I was paid ahead without Nelnet informing me that my monthly payment for these months was {$0.00}, thus Nelnet soliciting me to pay {$0.00} per month was deceptive and predatory ; and ( 3 ) if I was accumulating the remaining approx. {$1000.00} in interest monthly as a result of not making a payment ( THAT WAS NOT DUE ), shouldn't those advanced payments have covered the portion of the interest that was my responsibility for those 6 months XXXX XXXX XXXX XXXX XXXX Where did my advanced payments go? No one can give me an appropriate explanation for this. Instead, the representative pointed to the portion of the statement that states the following : " While not required, you may continue making monthly payments even if no payment is due, as interest continues to accrue. Eligibility for certain benefits may also require monthly payments. Otherwise, your next payment is due on XXXX XXXX XXXX XXXX XXXX I explained to the rep that I understand interest continues to ACCRUE daily, but the subsidy is an entirely different issue. Regardless, the rep has told me that I received a subsidy during this time period, so the above disclosure isn't even relevant. If I did indeed receive a subsidy during this time period, then why was my remaining interest that accrued during the month that was my responsibility from my XXXX XXXXXXXX payment not reflecting as paid? I have now accrued over {$6500.00} in interest for those six months with no explanation as to why my advanced payments were not applied to the portion of the interest that was my responsibility. SAVE was advertised as make your required monthly payment and the government will subsidize the remaining interest balance each month. It was emphasized that even if your monthly payment is {$0.00}, then you would still receive the benefit of the subsidy by having your full interest balance covered monthly. So, if I owed {$0.00} for that six month period, I either did not receive an appropriate subsidy, which should have covered all of the interest accrued during those months OR Nelnet misappropriated my advance loan payments during that 6 month period by not applying them to the portion of the monthly interest that was my responsibility.