Consumer complaint received 2017-01-19
Product: Student loan — Federal student loan servicing
Issue: Dealing with my lender or servicer — Trouble with how payments are handled
Company: Navient Solutions, LLC. (PA)

I 'm a first-time borrower in XXXX school with issues regarding payment allocation on behalf of Navient, my loan servicer. According to Navient 's website, payment allocation for Federal Direct Unsubsidized Student Loans would first be applied towards any late fees ( which do n't accrue on this type of loan, according to their website ), then next to any unpaid interest, and lastly, towards principle balance. I was under the impression that I could keep track of my interest that accrued, make payments accordingly, have those payments applied towards said interest, and if I chose to pay more during a payment, to have it allocated towards principle. It was never disclosed if I had to make payments on time each month, but my first two monthly payments ( in the exact amount of the interest at that point in time ), were applied as a " customer refund to reduce principle ''. I was n't expecting my payment to be applied that way, so I sent an email questioning it, only to again be told that my payments would be applied first to interest, then principle, which did not happen. I made a payment on XXXX/XXXX/XXXX, 4.5 months after first disbursement, and it went towards the interest. I figured the first two payments may have been a glitch. I then made a payment for the new semester on XXXX/XXXX/XXXX, which again, went towards a " customer refund ''. I wrote again, just to get the same reply, once again, about payments going towards interest first, then principle, except this was still not happening in my case. I called Navient on XXXX/XXXX/XXXX and spoke to a rep, who disclosed to me that there is a " 120 day holding period after disbursement '', where all payments made within those 120 days would be a " refund ''. I explained to her that that was not disclosed anywhere Navient 's website. I asked her where on the website I could find that disclosure, and she did n't answer my question. She repeated again that on XXXX XXXX XXXX, my payments would be applied towards unpaid interest. I explained that while attending school XXXX and working XXXX hours a week, I ca n't afford to wait that long to pay a lump sum, and that I would like to make small payments each month to keep up with the interest. The website explicitly states that my payments will be applied to interest, then principle, and I have the same statement in email form from Navient. She explained that if that 's how I want my payment allocated, I have to call each time I make a payment. I should not have to do so when I am told, in writing and on the website, that my payments will go towards interest and then principle, not the opposite. In addition to this, I am unable to claim any tax deductions since they mishandled my payments in XXXX and applied them towards the principle, and not interest, as I had intended, and was under the false pretense that that 's how my money would be allocated. I am fed up with this company telling me they will handle my money one way, but do something else with it.