Consumer complaint received 2021-01-20
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Problem with customer service
Company: Nelnet, Inc. (DC)

Nelnet Servicing , LLC is a wholly-owned subsidiary of Nelnet Diversified Solutions LLC, which is a wholly-owned subsidiary of Nelnet Inc ( collectively Nelnet ). Nelnet administers, services and collects student loans throughout the United States. In addition to privately owned debt, NelNet contracts with the federal Department of Education regarding the administration and collection of student loans owned by the Department. 

On XX/XX/XXXX I received notice from my credit monitoring service that late payments had been reported on my credit report. Upon investigation the late payment reporting came from NelNet, a company I had never heard of. Upon contacting NelNet I was told that my federal student loans had been purchased in XXXX from my prior loan servicer and then almost immediately put into deferment. When speaking to XXXX customer service provider XXXX on XX/XX/XXXX, I was told multiple times that my loan would be put in further forbearance to make me current. I had told her multiple times during the conversation I would not have trouble paying and could pay the amount in full. XXXX was insistent that my loans be placed in forbearance, despite my ability to pay, until I asked to speak to her supervisor. The language she was using and insistence on forbearance appeared to come from a script. 
Upon being transferred to XXXX supervisor XXXX, I explained my ability to pay and the circumstances that led to NelNets reporting on my credit. After explaining that I would pay the amount in full, I asked that the late payment be removed as I had never received contact from NelNet ( including notice of their becoming my loan servicer, that any amounts were late, that payments were due during CARES Act forbearance ), and that studentaid.gov the only method that would have been available for me to see the loan showed no amount due. XXXX stated that by federal law it was illegal to remove NelNets credit reporting. XXXX then advised me not to attempt any dispute as it could further harm my credit. 

Later in the evening I called NelNet a third time asking for a copy of the Master Promissory Note from XXXX, and a copy of all attempted contact from XXXX to myself. The only contact attempted by NelNet was a letter from XX/XX/XXXX explaining a repayment schedule that was sent to an address I am not familiar with. When I explained to NelNet that there was no way for me to know that they were now my loan provider, and that no notices of any pending payments were sent, I was told that I should have kept my information current on Studentaid.gov. My information was correct on studentaid.gov and had never to my knowledge shown the address used by NelNet, and was correct since at least the time NelNet became my loan servicer. 

I believe NelNet violated federal provisions that apply to servicers of FFELP loans. Following are a descriptions of the laws I believe applied to my loans and the subsequent credit reporting. 

Title IV of the Higher Education Act of 1965 contains several provisions that pertain to student loan servicing, one such provision is 20 U.S.C. 1082 which applies to FFELP loans. The Education department has promulgated several servicing-related regulations under its rulemaking authority under Title IV of the HEA. Nearly all of these regulations are codified in Part 682 of Title 34 of the Code of Federal Regulations, which governs FFELP loans. 682.208 ( c ) ( 2 ) provides that [ w ] hen a lender learns that a Stafford loan borrower or a student loan borrower is no longer enrolled at an institution of higher educationsthe lender shall promptly contact the borrower in order to establish the terms of repayment. 682.208 ( e ) ( 1 ) provides information, that in the event of the assignment or transfer of ownership interest of a Stafford loan results in a change in the identity of the servicer, certain information must be provided. This information includes notice of the assignment and the effective date of the assignment or transfer of the loan. 682.208 ( g ) provides that if during a period when the borrower is not delinquent, a lender receives information indicating it does not know the borrowers address, it may commence the skip-tracing activities specified in 682.411 ( h ). 

34 CFR 682.411 describes the due diligence in collecting guaranty agency loans. 682.411 ( b ) states that delinquency begins on the first day after the due date of the first payment that is not later made. 682.411 ( c ) ( 1 ) states that for accounts 1-15 days delinquent, the lender must send at least one written notice or collection letter to the borrower informing the borrower of the delinquency. 682.411 ( d ) describes due diligence efforts for loans 16-180 days delinquent. ( d ) ( 1 ) provides that during 16-180 days the lender must engage in at least four diligent efforts to contact the borrower by telephone and sent at least four collection letters, with at least one effort to contact the borrower by telephone before the 90th day of delinquency.