Consumer complaint received 2017-03-03
Product: Student loan — Federal student loan servicing
Issue: Dealing with my lender or servicer — Trouble with how payments are handled
Company: Nelnet, Inc. (LA)

On XX/XX/2017, I received correspondence from Nelnet that I could apply for an income-driven repayment plan. On XX/XX/2017, I received correspondence from Nelnet, which stated : " Your federal student loans are in their six-month grace period, so we 've placed your income-driven repayment request on hold. We will process your request once your grace period ends. '' When I logged into my account to make my first payment in XXXX, my application had not been processed as Nelnet had stated in the letter. I was unable to afford the {$830.00} amount that was due, and I informed Nelnet of my inability to pay and their error in failing to process my application. I was informed by Nelnet that my application was not processed because it was submitted too early -- in direct contradiction with their earlier correspondence to me -- and that I would have to reapply. I was told that the only manner in which I could avoid the {$830.00} payment was to request a forbearance. I had no choice, and I incurred thousands of dollars in interest charges due to my requested one-month forbearance while my second application for an income-driven plan was being processed. 

My application was accepted for Pay as You Earn repayment plan at the end of XXXX, and I made my first payment of {$150.00} at the end of XXXX. I also signed up for the AutoDebit option on the website. 

Today, I looked at my bank statement and saw that Nelnet had debited {$830.00} from my account on XX/XX/2017 ( the payment 's due date ), even though I was only obligated to pay {$150.00} under my repayment plan. I contacted Nelnet, and the representative told me -- after placing me on hold for 5 minutes -- that the {$830.00} figure was, in fact, the correct figure. I told him that could not be true, because such a figure represents nearly 30 % of my total income -- drastically over the 10 % of discretionary income that the payment is supposed to be capped at by law. After placing me on hold for another 5 minutes, I was transferred to another representative. That representative told me that the {$150.00} figure was, in fact, the figure that I was obligated to pay. He told me that it would take some time to fix the issue and that the Department of Education would not be able to refund my excess payment for 4 -6 weeks. 

There are two discrete issues here. 

First, Nelnet explicitly told me to apply for an income-driven plan and later explicitly told me that my application would be processed in due time. It was not processed, I was told that I was at fault for that failure, and I incurred thousands of dollars of interest charges because I necessitated a forbearance through no fault of my own. 

Second, Nelnet, through their AutoDebit service, debited an extra {$670.00} from my account in the month of XXXX. It is unreasonable to make such a mistake -- I am just starting my career ; I am engaged in XXXX ; I make a modest salary ; and I have expenses such as rent, food, and utilities that I can not afford now because of this gross error. Because of Nelnet 's negligence, I now am worried that I can not pay my rent, keep my utilities on, or afford food for the remainder of XXXX until my refund from the Department of Education is processed. 

Not only was Nelnet negligent, but their representative actively attempted to mislead me by stating that the {$830.00} figure was the correct amount. If it were not for my own diligence, they would have continued to charge me an excess {$670.00} every month, leading to my complete financial ruin. 

Thus, I have had nothing but problems with Nelnet. First, I incurred thousands of dollars of interest charges because I merely trusted their correspondence, which stated explicitly that my application would be processed. Second, they debited an excess {$670.00} from my account and actively tried to mislead me to believe that they were not in error.