Consumer complaint received 2022-08-02
Product: Student loan — Federal student loan servicing
Issue: Struggling to repay your loan — Problem lowering your monthly payments
Company: Nelnet, Inc. (OR)

I am trying to get my finances in order so that I can get approved for a home loan in the future and I have spoken with my servicer Nelnet multiple times to try and see what repayment plan would be best for getting my monthly payments lowered. I recertified last time for income based repayment plan last time and initially got a response that it was not approved even though I was previously on it. Subsequent I received an email that it was reopened and approved but I noticed that a couple of the loan groups were put into a Revised Pay as you earn plan, so I called Nelnet back. It didnt really make sense to me but they told me it was still Income based repayment, just a different type. I have been paying my loans during Covid  so I asked when they reported to the credit bureaus and the guy I spoke with said they wouldnt unless it was negative. I challenged that and he agreed that if it was a positive reporting theyd report it. I think they shouldnt have to be corrected. But my problem is twofold. In order to eventually qualify for a home loan my monthly payments need to lower and that is only an option ( MAYBE ) if I consolidate ; which comes with its own risks and lack of benefits. I am not interested in consolidating in case I later need to change my status. For home loans as you know, they do not accept {$0.00} due for student loans, they use a percentage of the whole balance which makes my DTI too high. I understand that this is my responsibility because I signed a loan agreement but at the time I was young, a single mother and it was following a recession where jobs for someone with little experience was hard to find. In addition, since the federal government subsidizes a lot of loans, high education institutions are not picky about who they approve loans for and in fact recruit in high school, persuading young people that college comes with a payoff. It doesnt. Instead, it traps young people into poverty. It limits a whole generation like me from qualifying for a loans because of the varying protections and terms of different types of loans. Its predatory lending at the highest level. The CFPB should be aware of this. What I need is leverage or flexibility in how debt is calculated. Owing XXXX while poor might sound good to someone unaware, and if I hadnt done my independent research I would be unaware, but peeing XXXX with the ability to pause payments during hardship will wreak havoc on your eligibility moving forward. I am low income and I can afford a low payment every month ( in fact I have been making larger payments ) but that option will restrict you from the benefits of XXXX  payments IBR plan. Why should a borrower be forced to consolidate loans in order to have the same flexibility as those who dont pay? Its unfair and Id say abusive. High education institutions do not pull you in and clearly warn potential students about how this will affect your ability to get housing in the future. They prey on young people who are desperate, not fully matured or able to repay. They dont even look at ability to repay. Thats one part of predatory lending practices and for some reason it doesnt apply to student loans. Colleges pair you up with student advisors who have no understanding. And just how banks or other lenders are audited, how are student lenders audited? They try to clean it up after the fact but that is not protecting borrowers. It would be beneficial for lending to be consistent across the board. It would be beneficial for every year in school, students had to revisit the terms they sign and look at ability to repay. It would be beneficial if as the government subsidizes loans, it doesnt trap people into poverty who are following the influence of those representing the institutions that make money of loans. Secondly, since I have been paying on my loans during the pandemic, it would be nice if those payments counted towards the 20 years of repayment requirement for forgiveness. I have called my servicer multiple times over the last year to ask them about this and they say the 20 years will resume after the Covid deferment ends. I ask if they can take me out of it and they can not? It doesnt seem right. It is as if they wont count it because the government decided to pause interest and therefore borrowers have to wait for the government to change policies. This is bad all around and its not right that the government, with institutions that reap a mutual benefit, gets to make policy that results in this delay, pretend like they are helping borrowers when in reality, they are not counting this as a repayment period because they are not collecting interest on predatory loans that almost coerced a whole generation into getting. These practices would not be allowed on credit cards, mortgages, personal loans, etc., but it is okay for student loans for some reason. My complaint to summarize is that time in repayment should include time during Covid and student loan repayment terms should be clearer and more flexible as it relates to monthly debt obligations. It should not be XXXX ( XXXX dollar-IBR/IDR ) or the other ( consolidate ) choice. Please give student loan borrowers who were likely coerced into thinking college was necessary and not made clearly aware of the impacts of the terms in the future a chance. Thank you!