Consumer complaint received 2017-06-23
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Don't agree with the fees charged
Company: Nelnet, Inc. (CA)

For several years now, I have been signed up for the IBR plan for my federal student loans, administered through NelNet. I used the IBR plan as it both allowed more flexibility in monthly payments, and kept interest from capitalizing as long as I was on the plan. As my intention was to get the loans paid off in a quick manner, I wanted to be as efficient as possible. <P/>On XXXX XXXX XXXX I submitted my repayment plan recertification through the Student Loans.gov site and received a confirmation email from the site. On XXXX XXXX, Nelnet sent me an email notifying me that they had received the application, and that they would be in touch regarding any needs. I believe I mailed in my paper application, as instructed by the website, on or around XXXX XXXX. On XXXX XXXX, Nelnet sent an email confirming that my application was in review. I received another such email from Nelnet on XXXX XXXX. On XXXX XXXX and XXXX XXXX I received standard communications regarding my account ( auto-debit, and a statement available ). No other communications from Nelnet were received until XXXX XXXX. <P/>In the meantime, XXXX XXXX XXXX was my last of work. As of XXXX XXXX, I was working on starting XXXX XXXX XXXX, under the understanding that I was on IBR, and would be able to continue the lower payments. My income therefore dropped to {$0.00}. <P/>On XXXX XXXX XXXX Nelnet notified me via email that all the accrued interest XXXX just short of {$50000.00} ) was going to capitalize, meaning it would be added to the principal amount of the loan and I would be charged interest on it. This would make it much harder for me to repay the loans, as interest would accrue faster. <P/>I called Nelnet on XXXX XXXX and spoke with an associate who explained that because I had " missed '' the deadline of XXXX XXXX to submit my income verification, the loan reverted to standard repayment and the interest capitalized. He insisted that a letter had been sent on XXXX XXXX informing me of missing information in my application. I never received such a letter ( as evidenced by the dates of communications I did receive outlined above ). He also told me that Nelnet has an internal processing time of 15 days, and so I needed to have my application in by XXXX XXXX in order to have it done in time. If I had turned in my application before the deadline, but not in enough time for processing, I would still have lost my IBR status. He let me know that there was no way to undo the capitalization of the interest. He did put me on a forbearance so that I could have time to determine my options. He then passed me on to a supervisor. <P/>The supervisor also noted the existence of a XXXX XXXX letter. I emphasized that I never received such a communication. I informed the supervisor that it was my belief I had accurately submitted the application, and no communication to the contrary was received. It was my contention during the phone call that as I had not received any communication regarding anything wrong with my application that some amount of consideration should be extended. The supervisor admitted that I was signed up for electronic communications, so the email should have gone directly to my email. I informed him that no such letter arrived, and it was not in my inbox, in the folder where I file communications from Nelnet, in my spam or trash folders. He informed me that there was no way to undo the capitalization, and no one with authority in the organization to do so. He gave me some options for repayment plans, but I was unprepared to commit to any particular plan as I had no time to research my options. He said he would send me an application to turn in when I decided what I want to do.